One surefire sign something’s working? The government wants to tax it. Alas, it was only a matter of time before the Internet — the one sphere of enterprise that has remained relatively free from regulation — started coming under attack. This time, the government’s efforts take the form of a bill called the Marketplace Fairness Act, better known as the Internet Sales Tax.
Misleadingly titled, the Marketplace Fairness Act is nothing but an opportunity for crony bureaucrats to collect more money, and it is blatantly unfair to all Americans who use the Internet. It is especially unfair to my generation, which does almost everything online, from connecting through social media to keeping current on world events to finding the best sales. Most importantly, we use the Internet to start our own creative businesses. This bill, however, would devastate online businesses and could kill the characteristically entrepreneurial spirit of Millennials.
Currently online retailers collect sales tax only in states where they have a physical presence. The Marketplace Fairness Act would authorize states to collect sales tax based on the purchaser’s location of residence, irrespective of the retailer’s location. Retail giants like Wal-Mart, Target, and Amazon already have stores or warehouses in most states across the country and thus would not experience any major changes with the passage of this legislation.
Small businesses, on the other hand, would incur significant costs. For example, under this legislation, a store with just one location in Columbus would have to be capable of complying with not only Ohio tax codes but nearly 10,000 different tax codes nationwide. It has been estimated that the compliance burden would cost small online businesses $20,000 to $300,000 in the first year alone — not counting the sky-high costs of audits, lawsuits, and accounting fees.
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This bill acts as a significant barrier to entry for small businesses and will force young people in the state of Ohio to put their dreams on hold, no matter how viable their product or business plans may be. Competing with well-connected and well-established retailers is simply not possible under the conditions imposed by the Marketplace Fairness Act.
At this point, one more tax on my generation is just adding insult to injury. Young people ages 18 to 29 in Ohio face an unemployment rate of nearly 11%. On top of that, nearly 70% of college graduates in Ohio owe an average of $29,037 in student loans. The Marketplace Fairness Act is yet another government policy that puts my generation at a disadvantage. We cannot afford policies that favor big companies and actively work to protect monopolies while forcing us to put our dreams on the back burner.
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This isn’t a partisan issue — Democrats and Republicans alike believe that the Internet should remain free. Transcending party lines, nearly 60% of people in the Buckeye State express opposition to the Internet Sales Tax. Ohioans particularly object the provision allowing the Internet Sales Tax to fund other states’ treasuries.
Congressman Jim Jordan (R-Urbana) recognizes that the Marketplace Fairness Act is just another tax increase, and he agrees that more taxes bog down the economy and prevent job growth. Young people in the great state of Ohio need more leaders on their side who will continue to fight for equal opportunities for entrepreneurs and Millennials.
Still, some politicians remain tone deaf to popular opinion and to their own constituencies. Senators Sherrod Brown (D) and Rob Portman (R) both voted in favor of the Marketplace Fairness Act last spring. They’ll have a chance to reconsider their votes this September, and I urge them to think long and hard about the negative consequences this bill unleashes on young people in Ohio.
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My generation, in particular, sees online freedom as a critical component to our future success. But the Internet is a universal tool that can better the lives of all who use it, regardless of age. Simply put, Americans do not want and cannot afford the Internet Sales Tax. We believe that the online marketplace should remain fair and free.
Alex Goodman, 28, is the Ohio State Director for Generation Opportunity, a youth advocacy organization. He can be reached through the editors at firstname.lastname@example.org. Read all articles by Alex Goodman here.
All opinions expressed belong solely to their authors and may not be construed as the opinions of other writers or of OCR staff.
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