Marketplace Fairness Act Myth: “Level Playing Field”

One of the focus group-tested themes by the pro-Marketplace Fairness Act groups is that they are pushing for a “level playing field”.  How noble of Wal-mart, Best Buy, Amazon and others to push for small businesses to be on a level playing field.   Which of course, is nonsense on many levels.

Why Efairness/MFA undeniably won’t create a level playing field:

  •  $1 Million Small Business Exemption – there will always be a steady stream of smaller retailers with products for sale without tax.
  • Cheaters – Many people selling through Amazon or Ebay that should collect sales tax don’t.  This won’t change.
  • Foreign Sellers – Will not be bound by the MFA.  I’m seeing more foreign sellers through Amazon than ever, especially from Japan & China.
  •  “99% of businesses won’t be affected by MFA”   What’s so funny is the cognitive dissonance of proponents who try and minimize the impact of the MFA on businesses.    If actually true, it means only 1% of the stores would start collecting sales tax, so that won’t help “Main Street” businesses at all.

The flip side of a level playing field is the tired argument that MFA would equalize online and brick and mortar retailers.  Phrases like “online-only sellers should collect sales tax from dollar 1, just like he must”.  Again, nonsense.

  • Online retailers do collect sales tax “from dollar 1” where they have a physical presence, just like traditional retailers.
  • MFA would bury smaller online retailers under a blizzard of audits and collection burdens that don’t exist offline
  • Can a small brick and mortar face audits and compliance costs for 46 states?  No.
  • Can a small brick and mortar be an unpaid tax collector for 46 states?  No.

So get over this rubbish that the Marketplace Fairness Act has anything to do with fairness.  It absolutely doesn’t.  Nor do Wal-mart and the other supporters care.  It’s just the shameless talking points to evoke an emotional response to an issue, to paper over horribly designed legislation that won’t actually do anything for fairness anyway.

UPDATE: Part 2 covers why the MFA is even LESS able to creae a level playing field.  Only 33% of the population lives in streamlined states that will be affected by MFA.  2/3 of the US doesn’t.

 

Trackbacks

  1. […] covered the myth of a level playing field pretty extensively already in a detailed post.  In short, the Marketplace Fairness Act won’t create the mythical “level playing […]

  2. […] of course it utterly false.  For all of the reasons I won’t rehash in Myth of a Level Playing Field & Myth of a Level Field, Part 2 MFA won’t bring a level playing field as it affects so […]

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