Federal Government Looking to Tax Internet – And Let States Do It Too

Federal Government Looking to Tax Internet – And Let States Do It Too
April 23, 2013

Seton Motley

Seton Motley is the president of Less Government, a DC-based non-profit organization dedicated to... (read full bio)

The Big Government, Never-Enough-of-Your-Coin-Coalition – Internet Division – is at it yet again.

The Barack Obama Administration has since it’s inception been very active in over-regulating the Web – for instance, Network Neutrality and Socialist-esque wireless price caps, to name but two huge power grabs.

Net Neutrality is in legal jeopardy – there are lawsuits pending to overturn it.  So President Obama’s Federal Communications Commission (FCC) has kept open the possibility of – again, without any authority to do so – over-regulating the Web further still:

President Obama will move the Internet from Title I to Title II.  Title II is how the FCC over-regulates landline telephone lines – you know, that bastion of innovation lo these last seventy-plus years. Title II opens up the Pandora’s Box of uber-regulation of the Internet. 

But wait – there’s more.  By so doing, the federal government is also looking to open yet another vein.

Under Title II, President Obama can also begin to tax the Internet – just as the Feds tax landlines.

Of course they are already uber-taxing your Internet use – on your wireless phones:

Checked your cell phone bill lately? (The Universal Service Fund tax) is 17.4% – an $8 billion total take in 2010 – and hurtling ever upward. 

And now they are looking to let the states pile on.

Senate Edges Closer to Vote on Internet Sales Tax

Legislation giving states the power to compel retailers outside their borders to collect online sales taxes, a touchy subject for Internet merchants, is likely to move forward in the Senate next week.

I wonder why this would be “a touchy subject for Internet merchants?”

Current law dictates that a state can only require a business to collect its sales tax if it is physically present within its boundaries….

S.743 (the Marketplace Fairness Act [MFA]) would countenance an enormous expansion in state tax collection authority by wiping away the “physical presence standard,” a baseline protection that shields taxpayers from harassment by out of state collectors….

Dismantling this protection for remote retail sales would create a very slippery slope for states to attempt collection of business or even income taxes from out of state entities.

Why would anyone object to being taxed by forty-nine states with which they have no relationship?  Taxation without representation on stilts, perhaps?

And of course it doesn’t at all complicate compliance matters.

(The MFA will) forc(e) online retailers to calculate and remit to more than 9,600 distinct taxing jurisdictions.

Nothing like in these interminably tough times making things for businesses infinitely more difficult and expensive.

No problem – they can begin figuring out compliance to the Marketplace Fairness Act right after they finish doing so with ObamaCare.  And Dodd-Frank.  And the President’s all-encompassing, on-all-fronts regulatory overrun.  And….

After they pay all those new taxes, and plow through those thousands-of-pages-of-new-law and hundreds-of-thousands-of-pages-of-new-regulation, I’m sure they’ll have plenty of money, time, and energy left to, you know, actually concentrate on their businesses.

Though that last part really isn’t at all important important to the Big Government Coalition.  For them, ‘tis far better that you be paid up on their taxes and in compliance with their red tape.

No matter how much red ink ensues.

P.S.: You can contact Congress and let them know how incredibly foolish – i.e. D.C.-like – they’re being with this new Internet tax here.

[First Published at Red State]

Seton Motley

Seton Motley is the president of Less Government, a DC-based non-profit organization dedicated to... (read full bio)