The proposed federal Marketplace Fairness Act (MFA)
grants states the authority to compel online and catalog retailers (“remote sellers”), no matter where they are located, to collect sales tax at the time of a transaction—exactly like local retailers are already required to do.
The issue the bill purportedly aims to address is the need of equal protection under the law. Currently, a state can compel a retailer to collect sales taxes only if the retailer has a physical presence in the state. This state of affairs, the MFA’s supporters claim, renders in-state retailers “at a competitive disadvantage” relative to out-of-state retailers. The MFA, they say, would “level the playing field.”
Granted, the MFA would “level the playing field” in a certain respect: It would cripple businesses that are not currently being crippled, thus rendering all businesses equally crippled by sales taxes.
A sales tax violates rights, harms businesses, and increases costs for consumers. The MFA, if passed into law, would harm all and financially ruin many internet businesses. The moral way to level the playing field is not to increase the extent to which rights are violated, but to decrease it. Sales taxes should not be expanded; they should be eliminated.
Of course, from the perspective of state governments, the MFA is a pragmatic means to financing their spending sprees. The MFA’s official website states explicitly that the act is intended to “help the many states now facing significant budget shortfalls.”
The Marketplace Fairness Act is a rights-violating, statist gimmick being pushed under the guise of “fairness.” Americans had better open their eyes, see it as such, and reject it wholesale. Once something like this is passed, there is usually no turning back.