OPPOSING INTERNET SALES TAXES: SINCE WHEN IS IT “CONSERVATIVE” TO DISCRIMINATE AGAINST LOCAL MERCHANTS?

5/7/13

As a lifelong crusader for lower taxes and less government, yours truly cannot understand why the Marketplace Fairness Act, which would enable states to compel online retailers to collect sales tax from their customers, is so controversial from an ideological standpoint.  The only quibble I have with the bill is that its name uses the word “fairness” in a world in which only the naïve expect fairness, but I digress.

Brick and mortar retailers have to collect sales taxes from their customers.   Why should their competitors in the online world, already unburdened from such costs as property taxes, rent, staffing, and other costs of a physical retailing presence, be able to maintain a further cost advantage by not charging sales taxes?   Brick and mortar retailers are already subsidizing their on-line competition, providing the rope by which they will ultimately be hanged, by having to serve as showrooms for those competitors.

Some are arguing that, yes, physical retailers collect taxes, but only for the jurisdictions in which they operate.   But if such brick and mortar retailers choose to operate in multiple jurisdictions, which many, if not most, do, they must collect taxes in all those jurisdictions.   Since the online retailers choose to operate in multiple jurisdictions, why shouldn’t they have to collect taxes in all those jurisdictions as well?   If the onliners don’t want to endure the complications of such collection, they can simply refuse to take orders from certain states, counties, or cities.  And it can’t be all that complicated to collect sales taxes; multi-jurisdiction physical retailers have figured it out.   Surely there are, or shortly will be, software packages enabling even the smallest online retailer to collect sales taxes anywhere in the United States.   And the cost of such software will go down, as does the cost of virtually all technology, as usage increases.   But if collection remains too difficult, again, online retailers can simply exit markets in which the cost exceeds the revenue potential.  How much would you like to bet that legions of retailers will choose to forgo markets due to the heavy burden of collecting taxes in those markets?

Knee jerk “conservatives” rail about higher taxes and encroaching big government, both of which I staunchly oppose.  But we are not talking about new taxes here; we simply are talking about collecting existing taxes.   The Wall Street Journal is really reaching in today’s (i.e., Tuesday, 5/7/13’s, page A16) editorial entitled “Backroom Internet Tax Ambush,” in which the Journal cites the potential for harassment of small online retailers by auditors from hundreds of taxing jurisdictions.   This is, of course, part and parcel of the Journal editorial page’s constant vigilance against the size, cost, and scope of government…unless we are considering going to war, when such considerations go right out the window, but I digress...again.

Some so-called conservatives have acknowledged the inherent unfairness of forcing brick and mortar retailers to collect sales taxes while letting online retailer skate.  So they propose simply eliminating the sales tax altogether.  Brilliant!   While such a proposal will appeal to those who never venture out of the Norquist/Limbaugh/Kudlow echo chamber, no one bothers with the messiness of coming up with any ideas about how the municipalities and states will make up the lost revenue, other than the vague but anodyne citation of “economic growth” and extolling the virtues of “cutting spending,” while providing no specifics on the latter. 

Speaking of the Norquist/Limbaugh/Kudlow echo chamber (And do see my instantly seminal 11/28/12 piece on the now defunct Rant Political entitled SORRY TO INCONVENIENCE YOU, MR. NORQUIST (pictured), which I have reproduced below for your convenience.), the real reason for opposing such an inherently sensible piece of legislation as the Marketplace Fairness Act has to do with the timidity and self-doubt of our Congressmen.  If these estimables dare exercise common sense, and stand up for the brick and mortar retailers that are such a vital part of the economies of our nation and of their districts, those politicians may, by some twisted logic, be considered “not conservative,” threatening their very self-styled identity.   Worse, they may run afoul of people who could bring big money, and the passions of the yahoos, into their districts and possibly imperil the lifelong sinecures they call “careers in public service” they have strived so hard to acquire.  Why, they may even have to return to the private sector whose virtues they have made a career of extolling while assiduously avoiding.

PROMISED REPRODUCED PIECE:

SORRY TO INCONVENIENCE YOU, MR. NORQUIST

11/28/12

This is a story I’ve told to friends for years, but I’ve been hesitant to put it on one of my very public blogs for two reasons.   First, I was concerned that it might have some negative consequences for some of the people involved.   Second, it sounds rather braggadocious.  

Time has healed my first objection; Grover Norquist is not, if he ever was, in a position to do any harm to any of the people involved.   But, for this public version of the story, I omitted names and obscured descriptions in those cases in which there might be negative ramifications, just in case.   As far as the second source of hesitation is concerned, I am hoping you will bear with what sounds like a display of vanity; this is too good a story not to pass on to my readers, especially with Norquist being so much in the news right now.   Besides, two of my friends to whom I have related this story recently, and who are both avid readers of my blogs and no fans of Norquist, have urged me to post this.  

So here goes…

I went to Washington back in 2000 for the first time in my life to see a friend of mine who then had a big job with a Senate committee.   He and I went to a big soiree for the Heritage Foundation to watch the first Gore/Bush debate and to hobnob with the self-important.  I met a couple people I always liked and still like (e.g., Bob Tyrell) and that I never liked and liked even less after meeting them (e.g., Bill Kristol).  

The next morning, my friend sets up breakfast with Grover Norquist, who was not as big a guy back then as he is now, but still was somebody.  We meet at some fancy Washington hotel and Norquist was hot to suck up to my buddy because my buddy had the ear of at least one very important senator at the time, the chairman of the committee for which my friend worked.  I left directly from my friend’s apartment to get to the breakfast; he was going to meet Norquist and me after stopping by the office for an early morning meeting with his boss, the Senator.  But when Norquist and I sat down to breakfast, my buddy hadn’t shown up.   We then got a call from my friend saying that he couldn’t leave the meeting and thus couldn’t be at the breakfast.  So Norquist started expressing his tremendous disappointment and started treating me like something he wants to scrape off the bottom of his shoe.   This was pretty stupid because he didn’t know me from Adam, but I was introduced to him through something of a bigwig and I could have been somebody with plenty of spondulicks to donate to his Americans for Tax Reform, which was a relatively new non-profit at the time.  But that didn’t seem to occur to him; instead, he was incessantly making it very clear that he didn’t want to spend any time at all with me, and it was only the two of us at the table.   As you can imagine, this was an awkward situation, and those of you who know me personally know that I am not a man of unparalleled patience.  Finally, having had enough of his backhanding and whining, I told him “Look, if you don’t want to be here, that’s fine with me.”  He says “Oh, no, I want to talk to you.  I was just hoping (my friend) would be here with us.”  Five minutes later, his actions his betrayed his true feelings, so I asked for the check, paid it, and told him I had to go.

He was quite happy about this…until…

I noticed as I was talking and Norquist was ignoring me that Morton Kondracke and Fred Barnes were at the next table.  They were big really big back then, in the heyday of “The McLaughlin Group” and “The Capital Gang,” much bigger at the time than Grover Norquist.

Now…a little background.   My barber since I’ve been 16, though I almost never get down there to get my hair cut from him any more, is a guy named Joe Scozio, who learned barbering from his dad and worked at his dad’s shop on 63^rd Street near St. Rita for the first maybe 10 years of his career.   Then he moved to his current location (Evergreen Barber Shop) on 95^th Street just west of Kedzie in Evergreen Park.  Joe is not only perhaps the greatest barber around, but he is a genuine barber and a man wise beyond anyone’s expectations.   I have met everyone from politicians to athletes to a guy who was having moral pangs about having as a (rent free) tenant a soon to be convicted pervert priest to a University of Chicago astronomer who is one of the few guys in the world who has had moon rocks in his house at Joe’s shop.   None of them compare with Joe, but that is another story.  Joe owns the building in which the barber shop is housed and the building next door.  Morton Kondracke’s brother, who is (or was; I don’t know if he is around any more) one heck of a nice guy and hard worker, at the time was renting the store next door from Joe and was doing shoe repair.  He would come by the barber shop and, if you wanted, shine or even do a minor repair on your shoes while you waited to get your hair cut.  (Joe’s place is usually crowded; one chair, plenty of conversation, lots of customers and/or guys just hanging around to drink coffee, and shoot the breeze.  Getting one’s hair cut is not an in and out proposition, nor should it be.)   So I sort of knew Mort’s brother.  I’d never met Mort, though he stopped by the barber shop to get his hair cut and/or avail himself of Joe’s wisdom when he was in town to see his brother.

Back to the main story…

Norquist and I got up from the table, much to the relief of both of us, and I stepped over to Kondracke, apologized for interrupting, and told him I knew his brother through Joe Scozio.  Mort’s face lit up; he got up from the table, shook my hand, and asked more about Joe and how long I’ve known his brother and Joe.   He tells everyone at the table about his brother and the shop on 95^th in Evergreen Park just over the border from the south side of Chicago, etc.   Norquist suddenly got interested in me.   Then Mort said to me “You know Fred Barnes, don’t you?” and introduces me to Fred and everyone else at the table, none of whom I could identify, or in any case can’t remember.  Fred seemed to be a great guy as well.   Norquist was just standing by, hoping that I’d say something like “This is my friend, Grover Norquist,” or something like that, but I didn’t.   I just bid everyone at the table my best and left.   Norquist left, doubtless thinking that I must have really been somebody and he must have really ticked me off; he was right on the latter, wrong on the former, but I digress.   Little did he know that I’m really nobody but because I was lucky enough to have my dad introduce me to the right barber who introduced me to the right shoe repairman, I had a justification for introducing myself to a couple of guys with very big microphones who turned out to be far greater gentlemen than Norquist will ever be.

Funny story, I suppose.  But, boy, did I get a BAD impression of Grover Norquist.   Little does it matter to him what I think of him, I am sure, but, having been afflicted with Irish Amnesia (I forgive but I never forget.), I have detested the guy ever since, even though we at least once had quite a bit of ideological intersection.   Those days are rapidly fading into the rear view mirror, but I digress again.