Beware of Fiscal Potholes in Congress's Latest "Main Street Fairness Act," Taxpayer Group Warns

WASHINGTON, July 29, 2011 /PRNewswire-USNewswire/ -- Contrary to its name, legislation introduced today called the "Main Street Fairness Act" contains many unfair provisions that will adversely impact taxpaying consumers and business, according to the 362,000-member National Taxpayers Union (NTU). The bill, authored by Richard Durbin (D-IL) in the Senate and John Conyers (D-MI) in the House, would give the federal government's blessing to an interstate tax collection scheme known as the Streamlined Sales and Use Tax Agreement (SSUTA). NTU Executive Vice President Pete Sepp offered the following comments on the proposal:

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Despite its smooth title, the Main Street Fairness Act is riddled with fiscal potholes that would make the going decidedly bumpy for taxpayers. State revenue officials have long sought the required federal authority to tax beyond their borders, but with each passing year their arguments for SSUTA have become less credible.

We were told that 'tax-free shopping' was costing states enormous sums, even though businesses and customers involved in online transactions pay many levies such as property, profit, payroll, and fuel taxes. Additionally, many Internet purchases are already subjected to sales taxes. We were told that compliance with SSUTA would be a snap for businesses thanks to recordkeeping software, when in reality the cost and effort involved in complying with up to 15,000 jurisdictions' tax laws would be far from trivial. The bill's vague and ineffectual mention of 'small sellers' provides no promise of relief from these problems.

We were told that this legislation is necessary to level the playing field, even though the Internet has been small business' best friend. Because Main Street has an on-ramp to the Information Superhighway, mom-and-pop stores as well as sole proprietors can market their goods and services to the whole country or the world if they choose. Likewise, going online has allowed small firms to manage their overhead – from buying paper clips to retaining accountants – more efficiently than ever before.

Giving governments even more sweeping powers to tax won't restore any part of the private sector to health, especially the small businesses Americans are counting on to lead a resurgence in job and income growth. Furthermore, taxpayers are tired of being left holding the mop for state governments that refuse to clean up the wasteful spending habits causing so many of their current budget messes.

If Congress truly wants to be fair to Main Street, lawmakers should instead work on passing legislation like H. Res. 95, which affirms that Congress won't give states 'the authority to impose any new burdensome or unfair tax collecting requirements on small online businesses.' In doing so, they'll be paving the way to a much brighter future for our economy.

NTU is a nonpartisan, nonprofit citizen organization founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. The group was among the first to support the federal Internet Access Tax Moratorium and oppose the states' Streamlined Sales and Use Tax Agreement. Note: For more on NTU's work in this and other public policy areas, visit www.ntu.org.

SOURCE National Taxpayers Union

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