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Not a Tax Increase?

2:54 PM, Apr 29, 2013 • By GEOFFREY NORMAN
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The mayors of America have blessed the Marketplace Fairness Act, as Tom Cochran, CEO & executive director of the U.S. Conference of Mayors, writes in Real Clear Politics. This, of course, is the legislation that allows states, cities, towns, villages, and wide spots in the road (about 9,600 jurisdictions in all) to collect taxes on things their citizens buy online and obliges the sellers, no matter where they are, to do the tax collecting.  So if you live in Chicago and buy a guitar from an online seller in Los Angeles, that enterprise is obliged to add whatever Chicago would have collected if the instrument had been sold by an establishment on State Street and then send the money on to Mayor Emanuel to spend according to his city's needs.  

But, the Cochran – being of the political class – quickly falls into equivocations and dissembling, insisting that it is not about the money.  It's about fairness.

... make no mistake: This is not a tax increase. The bill simply gives state and local governments a way to collect money that is already owed. And, in the process, it levels the playing field between merchants on Main Street and those who sell over the Internet, allowing them to finally compete on equal ground.

Of course, the mayors could use the money which, according to Cochran:

... tops out at more than $55 million. Think of how many projects currently sitting in the pipeline -- from fixing bridges and roads to funding schools and law enforcement -- could finally get the green light with that kind of money.

Chicago would most likely use the money to prop up the woefully underfunded public sector pensions that have ruined the finances of the city and the state of Illinois but that's only fair.

And, anyway, this is going to be good for everyone:

Once enacted, the Marketplace Fairness Act will not only help state and local governments collect sales taxes, but will help make competition between all merchants fair and equitable, regardless of how the merchandise is sold. And, during these tough economic times, it will give a fundamental boost to the economy by helping to stimulate growth and create more jobs. It’s basic common sense and Congress should pass the bill immediately. 

The measure will, of course, raise prices on goods sold on-line and last anyone checked that did not necessarily stimulate sales.  And, then, there are those compliance costs which will depress activity at the small, start-up end of the online spectrum.  But Amazon, which backs the bill, will be happy to sell the necessary tools to its smaller brethren.  Or absorb their customers.  

So ... good for the political class and the big on-line players.  Bad for the small operators.  

Only fair.

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