Sen. Ted Cruz (R-TX)—the conservative darling who supposedly has his eye on the White House—struck a blow this week for a legion of catalog sellers and Internet retailers who fear a tax catastrophe bearing down on them from Washington.
In an interview with National Review Online, Cruz stated his concern that some of his Republican colleagues would attempt to serve the interests of big retailers in their states by helping Democrats push through the Marketplace Fairness Act (MFA) during Congress’s lame duck session. The bill seeks to force remote sellers to collect and pay taxes to the home states of each of its customers, a prospect that could result in prohibitive administrative and legal costs in the act of compliance.
“There are some voices in Washington who want a lame duck precisely so they can engage in corporate welfare and blame it on the Democrats,” Cruz told the news site. “One of my greatest concerns during a lame duck is that we could see leaders in both parties pushing through a nationwide Internet sales tax. That is one of the favorite causes of the corporate lobbyists on K Street, to jack up taxes on millions of mom-and-pop Internet retailers. Now, that helps all the big businesses at the expense of the little guy.”
Just last June, Republican Senator Mike Enzi of Wyoming joined forces with Illinois Democrat Dick Durbin on a back-door play to pass MFA by attaching it to the Internet Tax Freedom Act, an unrelated measure that seeks to ban taxing consumers for broadband Internet usage. It didn’t happen, but Cruz and industry groups representing remote sellers fear a reprise of this kind of action during the lame duck.
In an editorial on its website this week, NetChoice, an association of e-commerce companies, lauded Cruz for taking a “brave stand” on Internet taxes. “Sometimes doing the right thing in Washington means calling out your allies when they’re in the wrong,” read the piece, which noted that many members of Congress would like to see the contentious issue go away. “If that means passing a bad bill when nobody is paying attention, and then theatrically pointing fingers at each other, so much the better.”
Cruz’s statement was also praised by American Catalog Mailers’ Association president Hamilton Davison in an email to members this week. “Senator Cruz alone won’t stop Congress from attaching Internet sales tax to other must-pass legislation during the lame duck,” Davison warned them and urged them to write to their Congressional representatives pledging their allegiance with the True Simplification of Taxation coalition, the industry lobbying effort aimed at scuttling MFA.