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Dr. Art Laffer Economic Impact Report

Pro-Growth Tax Reform & E-Fairness

E-fairness legislation like the Marketplace Fairness Act—if used correctly by states—could be a boon for the American economy, resulting in 1.5 million jobs and an additional $563 billion in GDP over the next decade. Click on a state to learn how this pro-growth reform will lead to more prosperity in your state.

Conservatives Support E-Fairness

Click to view the quotes from the Conservatives that support E-Fairness.

Conservative Thought Leaders & Activists

William F. Buckley

“If the advantage of tax-free Internet commerce marginally closes out local industry, reforms are required... The mattress maker in Connecticut is willing to compete with the company in Massachusetts, but does not like it if out-of-state businesses are, in practical terms, subsidized; that’s what the non-tax amounts to. Local concerns are complaining about traffic in mattresses and books and records and computer equipment which, ordered through the Internet, come in, so to speak, duty free.” (William F. Buckley, “Get That Internet Tax Right,” National Review Online, 10/19/01)

Arthur B. Laffer

“In-state retailers collect sales taxes at the time of purchase. When residents purchase from retailers out of state (including over the Internet) they are supposed to report these purchases and pay the sales taxes owed—which are typically referred to as a "use tax." As you can imagine, few people do. The result is to narrow a state's sales-tax base. It also leads to several inefficiencies that, on net, diminish potential job and economic growth. Exempting Internet purchases from the sales tax naturally encourages consumers to buy goods over the Web; worse, the exemption incentivizes consumers to use in-state retailers as a showroom before they do so. This increases in-state retailers' overall costs and reduces their overall productivity.” (Arthur B. Laffer, “Tax Internet Sales, Stimulate Growth,” The Wall Street Journal, 4/17/13)

Al Cardenas

"A robust free-market system requires a level playing field, where the government doesn’t get to pick winners and losers in the marketplace. Senator Enzi and Congressman Womack deserve praise for their efforts to empower states to make their own revenue policy choices and create a fair system of tax collection. The number one threat to the future of American competitiveness isn’t other countries-- it’s our tax law. When it comes to state sales taxes, it is time to address the area where federally mandated prejudice is most egregious — the policy towards Internet sales, the decades-old inequity between online sales and in-person sales as outdated and unfair.” (“Statement from ACU Chairman Al Cardenas Applauding Efforts to Address Marketplace Fairness,” Press Release, 2/14/13)

Paul Ryan

“To me, I think the concept is right… It’s only fair that the local brick-and-mortar retailer be treated the same as the big-box online sales company out of state.” (Ryan Ekvall, "Paul Ryan talks immigration reform, taxation at Janesville town hall," Wisconsin Reporter, 4/29/13)

Hector Baretto

“If online companies with up to $30 million in sales are exempted from the Marketplace Fairness Act, it would unfairly punish small local retailers. To justify their argument, eBay bases this figure in part on the Small Business Administration’s definition of small business. But that delineation was set with traditional, brick-and-mortar companies in mind. As former administrator of the SBA, I am confident that no one ever intended that figure be used to exempt online businesses from collecting and remitting legally owed taxes. eBay should not be allowed to preserve special treatment in the tax code for a handful of giant multi-million dollar online sellers at the expense of the hundreds of thousands of small businesses on Main Street.” (Hector Barreto, “Sales Tax Laws Should Treat All Companies The Same,” The Hill, 3/18/2013)

Ned Ryun

“One of the basic principles of the conservative movement is that the market, not the government, should pick economic winners and losers. The only role that government should play is to ensure a fair and level playing field. When it comes to sales taxes, that principle has gone out the window in the Internet age… The tax discrimination in favor of online sales is unfortunately another example of a federal government that has lost its way by clinging to its power. Under federalism and the 10th Amendment, powers not vested in the federal government are retained by the states... Decisions that can be made by governors and state legislatures—who are close to the people and thus responsive to citizens’ needs—should be left at the state level. That is the heart of true federalism. (Ned Ryun, “Main Street Deserves A Level Playing Field,” The American Spectator, 3/15/2013)

Colin A. Hanna

“By tacitly permitting most online retailers not to collect sales taxes the same way that brick-and-mortar retailers do, the federal government is in essence providing a government-created competitive advantage to a class of online e-tailers over the traditional retailers who are the backbone of American small business… Current law on Internet retail sales does not promote transparency; instead it countenances a hidden subsidy to a certain kind of business. To support this is not a conservative position and actually undermines one of conservatism’s cardinal principles: the rule of law.” (Colin Hanna, “Level the Playing Field between Retailers and E-Tailers,” The Hill, 3/19/2013)

James L. Martin

"The vast majority of America's seniors agree that, as a matter of fundamental fairness and personal responsibility, laws should not favor those who have the ability to avoid properly owed taxes by conducting business out of state, or in the tax haven of web commerce... [I]nternet commerce is not an infant industry that requires protection, but is now well ingrained and established in the lifestyle of nearly every American. To allow it to remain a haven for tax avoidance hurts us all, and needlessly complicates tax policy by forcing states to attempt to predict consumer trends and behavior. The 60 Plus Association stands with the unanimous bi-partisan coalition of Governors across the United States who ask you to support this fair, necessary and commonsense measure." (James L. Martin in a letter to Congress, 3/19/2013)

Stephen DeMaura

“The Marketplace Fairness Act is a workable solution that finally levels the playing field for small businesses and empowers states to collect the taxes that are already owed. For states like Montana, New Hampshire, Delaware, and Oregon that currently have no sales tax, nothing will change. For those that do have a sales tax, states will merely be empowered to have online retailers collect the existing sales tax from consumers at the time of purchase, like our local retailers do. Most importantly, the Marketplace Fairness Act makes these reforms in a way that puts the ultimate taxpayer first, protecting individuals, empowering consumers, and encouraging economic growth.” (Stephen DeMaura, “Online Sales Taxes Done Right,” Real Clear Policy, 3/15/2013)

Curtis Riskey

“Unfortunately, due to a loophole caused by the 1992 Quill Supreme Court decision, our independent Christian retailers are put at disadvantage because Internet-only companies are not required to collect sales taxes. This unlevel playing field has resulted in staffing reductions and the closing of many of our independent Christian retailers over the past few years, threatening the very existence of our membership and their ability to serve our Christian communities… As the saying goes, a sale, is a sale, is a sale, and our sales tax collection policies should be the same regardless if an item was purchased online or through one of our members’ store fronts. Local independent businesses are a more important economic generator for our communities than out-of-state businesses seeking tax avoidance.” (Curtis Riskey in a letter for Senator Roy Blunt, April 2012)

Hanns Kuttner

“Current policy gives remote sellers a price advantage, allowing them to sell their goods and services without collecting the sales tax owed by the purchaser. This price difference functions like a subsidy. It distorts the allocation between the two forms of selling. The subsidy from not collecting tax due means a larger share of sales will take place remotely than would occur in a free, undistorted market.” (Hans Kuttner, “Future Marketplace: Free and Fair,” May 2012.)

Charles Karuthhammer

“The real issue here is the fairness argument – that if you’re an old fashioned store, you have to have your customers and you pay the sales tax and online you don’t. Which, I mean, you’re already at a disadvantage if you’re an old fashioned store: you have to have, you have to cover rent, you have to cover insurance and all that. So I think you want to have something that will level the playing field. You can do it one of two ways. You abolish all sales taxes for real stores and nobody pays. Or you get the Internet people to pay the sales tax as well. I think the second one is the only way to do it, obviously.” (“Friday Lightning Round: Internet sales tax bill,” Fox News Special Report with Bret Baier, 4/26/13)

Christopher Caldwell

“California governor Jerry Brown killed two birds with one stone last month when he signed a law that would require internet retailers to collect the state’s 7.25 per cent sales tax. He was raising needed revenue. And he was addressing a great injustice of the information age. State and federal legislators made a big mistake when they exempted e-commerce from taxes in the 1990s. They were giddy with the rhetoric of cyberanarchism and inspired by anti-tax yahoos convinced raising revenue is an optional part of running a government. The kindest thing one can say about the policy is that it constituted an overgenerous subsidy to an infant industry.” (Christopher Caldwell, “Why Amazon’s Tax-Free Landscape Needs Bulldozing,” The Financial Times, 7/15/11)

Governors & Former Governors

Scott Walker

“Since taking office, it has been my priority, and the priority of a number of members of the legislature, to provide tax relief to middle class families, and to foster an environment that promotes job creation. I want to make clear, should federal Marketplace legislation become law, my intention would be for any resulting additional revenue be used to provide individual income tax relief for Wisconsin’s taxpayers.” (Letter to Wisconsin Congressional Delegation, 5/15/2013)

Paul LePage

“Last week, Gov. Paul LePage, R-Maine, wrote his state’s two U.S. senators, Republicans Susan Collins and Olympia Snowe, to urge them to back legislation introduced by Sens. Mike Enzi, R-Wyo., Dick Durbin, D-Ill., and Lamar Alexander, R-Tenn., that would close a loophole left by a 1992 Supreme Court decision. The high court ruled that states can’t require retailers such as catalog and now online retailers to collect sales taxes from customers in states where those companies have no physical presence. ‘There’s no denying that passing the bill would give thousands of small Maine businesses a real boost,’ LePage wrote. ‘Through no fault of their own, federal policy now gives some out-of-state corporations an unfair advantage over other Maine retailers.’” (Juliana Gruenwald, “Tea Party Governor Is Backing Net Sales Tax Bill,” National Journal, 3/20/12)

Terry Brandstad

“The legislation would stop picking winners and losers through disparate enforcement of sales taxes for brick and mortar retailers versus online retailers – ultimately leveling the playing field between Iowa’s small businesses and large online businesses... I intend to utilize any related revenue that the State would receive to enable further tax relief to Iowans, including income tax reductions. Such reductions would help stretch family incomes, create jobs, and increase our competitiveness compared to other states. Governors from across the country support this legislation because it provides an opportunity for Federal leaders to enact an equitable solution that allows for a predictable, simple, and streamlined approach for states to consistently enforce sales tax laws. Simply put, this legislation allows for main street Iowa businesses to be treated more fairly, recognizes the states' rights to enforce their own tax laws and provides a solution to a long-standing issue and tax loophole. I join governors of both parties and a bipartisan group of US Senators in support of this legislation.” (Letter to Iowa Congressional Delegation, 6/12/2013)

Mike Pence

“I don’t think Congress should be in the business of picking winners and losers. Inaction by Congress today results in a system today that does pick winners and losers.” (House Judiciary Committee, Hearing On “Constitutional Limitations On States’ Authority To Collect Sales Taxes In E-Commerce,” 11/30/11)

Chris Christie

Governor Chris Christie: “I just want to make clear that I have been working on this issue in my role on the executive committee of the National Governors Association because it is an important issue to all the nation’s governors. And I too – along with governors like Governor Daniels and others – urge the federal government and the Congress in particular to get behind Senator Lamar Alexander’s legislation to allow states to be able to make these choices for themselves. And I think Senator Alexander’s legislation would be a great step forward in that regard. It would give states options to decide how they want to deal with this and not have to any longer deal with the federal prohibition on dealing with it. So, it would allow us to do it in a much more uniform and broader way. So, I’m with Governor Daniels on this and other Republican governors – Governor Snyder of Michigan and others who feel strongly about it. And we’ve been working on it at the National Governors Association and I know we will continue to and hope to get some type of resolution to it by the end of this year.” (Press Conference, Governor Chris Christie, 5/31/12)

Rick Snyder

'Technology currently exists to quickly and effectively calculate taxes due on sales and can be easily be integrated into online retailers’ operations,’ wrote Snyder, a onetime venture capitalist and former executive at the computer company Gateway. ‘It is time for Congress to grant states the authority to enforce sales tax and use laws on all retailers doing business in their state.’ (Bernie Becker, “Michigan Governor Joins Online Sales Tax Chorus,” The Hill, 5/11/12)

Robert Bentley

“Alabama’s Republican governor has urged lawmakers from his state to support online sales tax legislation, adding to the growing roster of GOP officials who are on board with the idea. Gov. Robert Bentley told Alabama’s two senators and seven House members the online sales tax bills would improve the state’s fiscal situation, and stressed that the legislation would not create a new tax. ‘The bills will give Alabama the authority to collect sales taxes – as we currently do from local brick-and-mortar retailers – that are already owed from online retailers,’ Bentley wrote in a letter dated April 19. ‘Allowing us to effectively close this sales tax loophole would help both our state’s finances and our state’s small businesses.’” (Bernie Becker, “Alabama Governor Gets Behind Online Sales Tax Push,” The Hill, 4/25/12)

Brian Sandoval

“‘The only way to completely resolve this issue is for Congress to enact legislation that, within a simplified nationwide framework, grants states the right to require collection by all sellers,’ Sandoval said in a statement.” (Ed Vogel, “Gov. Sandoval Reaches Sales Tax Deal With Amazon,” Las Vegas Review-Journal, 4/24/12)

Gary Herbert

“On March 24, 2012, Utah Governor Gary Herbert signed into law an affiliate nexus bill that will require certain remote sellers to collect and remit Utah sales tax, effective July 1, 2012. An out-of-state seller will be considered to have nexus in Utah if the seller holds a substantial ownership interest in, or is owned in whole or in substantial part, by a related seller, and the seller sells the same or a substantially similar line of products as the related seller and does so under the same or a substantially similar business name, or the place of business of the related seller or an in-state employee of the related seller is used to advertise, promote, or facilitate sales by the seller to the purchaser.” (“Utah Enacts Affiliate Nexus Bill,” Sales Tax Institute, 3/24/12)

Bob McDonnell

“‘This bill helps to ensure that online retailers with a physical presence in Virginia are treated the same as traditional brick-and-mortar retailers who are already required to collect and remit existing sales taxes on goods sold in the commonwealth.’” (Press Release, “Governor McDonnell Announces Agreement Reached On Tax Fairness Bill,” Governor Bob McDonnell, 2/22/12)

C.C. "Butch" Otter

“Gov. C.L. ‘Butch’ Otter backs taxing Internet sales to level the playing field between virtual businesses and brick-and-mortar establishments on Idaho’s Main Street. Otter made the remarks to Idaho chamber of commerce leaders meeting in Boise on Monday.” (“Idaho Governor Supports Internet Sales Tax,” The Associated Press, 1/30/12)

Mitch Daniels

“[S]ales taxes that [states] impose ought to be paid, and paid by everybody equally and collected by everybody in the retail business … We’re not talking about an additional or new tax here – we’re talking about the collection of a tax that’s existed a long time.” (Jeremy Hobson, “Indiana Makes A Deal With Amazon On Sales Taxes,” Marketplace Business, 1/12/12)

Nathan Deal

“Gov. Nathan Deal is considering extending the state sales tax to online purchases, he told newspaper publishers Thursday morning … ‘In the absence of congressional activity on that ... I think there will be some appetite to act on that in the legislature,’ he said.” (Walter C. Jones, “Ga. Considers Online Sales Tax,” The Augusta Chronicle, 1/12/12)

Haley Barbour

“…[E]-commerce has grown, and there is simply no longer a compelling reason for government to continue giving online retailers special treatment over small businesses who reside on the Main Streets across Mississippi and the country. The time to level the playing field is now…” (Letter To Sens. Enzi And Alexander Endorsing S. 1832, The Marketplace Fairness Act, 11/29/11)

Bill Haslam

“The National Governors Association applauds your efforts to level the playing field between Main Street retailers and online sellers by introducing S. 1832, the ‘Marketplace Fairness Act.’ This common sense approach will allow states to collect the taxes they are owed, help businesses comply with different state laws, and provide fair competition between retailers that will benefit consumers.” (National Governors Association Letter To Sens. Durbin, Enzi, Tim Johnson And Alexander Endorsing S. 1832, The Marketplace Fairness Act, 11/28/11)

Dennis Daugaard

“On March 11, South Dakota enacted S.B. 146, sales tax legislation that requires out-of-state retailers that sell to in-state residents to notify their customers of their personal use tax obligation. Under the law, online sellers are required to provide clear notice to consumers during the checkout process that a South Dakota use tax is due.” (Rosemary Hawkins, “Sales Tax Bills Pass In Arkansas And South Dakota,” American Booksellers Association, 3/3/11)

Jeb Bush

“It seems to me there has to be a way to tax sales done online in the same way that sales are taxed in brick and mortar establishments. My guess is that there would be hundreds of millions of dollars that then could be used to reduce taxes to fulfill campaign promises.” (Letter To Florida Governor Rick Scott, 1/2/11)