Internet Sales Tax Emerges As Next Republican Fissure

A new wedge between old-school Republicans and Paul-style hybrids.

Image by Alex Wong / Getty Images

WASHINGTON — A proposal to strengthen sales taxes on internet commerce is emerging as a new litmus test for Washington Republicans, who are divided over a bill known by its sponsors as the Marketplace Fairness Act and by its opponents as the National Internet Tax Mandate.

The bill, first introduced in 2011, has set off a battle between two generations of Republicans and has given anti-tax leader Grover Norquist a new litmus test for judging the fitness of politicians who will soon be up for reelection. The legislation also an opportunity for Rand Paul to beef up his libertarian bona fides just as he tries to edge further into the mainstream.

“I think this will irritate people,” Norquist said in a telephone interview with BuzzFeed. “It’s a major issue for Drudge. It’s interesting to see, with the SOPA and PIPA things — I think it could get tougher for the tax-the-internet people now.”

And, Norquist said in a conspiratorial tone, “I think at some point people will figure out that their state legislator, their congressman, their senator made this possible.”

“Those people who think their fingerprints will not be found on the murder weapon will find out that they’re wrong,” Norquist said. “The guy running against you just might point that out.”

The bill, which strengthens states’ abilities to enforce sales taxes in exchange for states simplifying their tax procedures, has become a main cause of the libertarian Campaign for Liberty, the organization where Ron Paul now officially hangs his hat after leaving Congress and embarking on his speaking career. And Rand Paul, who has worked to put some air between himself and his father during his Senate term, has gotten in on the act, sending a letter out to the Campaign for Liberty’s email list calling for people to sign their petition.

If it moves — tax it.”
Unfortunately, that’s how the Big Government crowd in Washington thinks these days.

And now, members of BOTH parties in Congress are working feverishly to unleash a new National Internet Tax Mandate — setting the stage for government at all levels to take another heaping of your money. My good friends over at Campaign for Liberty are leading the charge to mobilize hundreds of thousands of Americans to stop the National Internet Tax Mandate.

Please take a moment to read the letter below from Campaign for Liberty President John Tate about how you can help fight back.

Congress is expected to move on the National Internet Tax Mandate any day now, so your IMMEDIATE action is needed.

“C4L is the lead on it because they are the vehicle for the Paul grassroots, and this issue is basically wheel house,” said one senior Republican strategist in Paul world. “Big-government Republicans striving to change the internet and taxation via the internet forever. Essentially what this would do is be placing the federal government in a position of informing sales taxes for states that chose to have them in states that chose not to have them.”

“That is a game changer, particularly for libertarians and Paul people who see themselves at the forefront of keep government out of the internet,” the operative said. “I think the news here is this is going to be an impending issue for Republicans pitting old school guys like Lamar [Alexander, the Senator from Tennessee] and [Wyoming Senator Mike] Enzi verses the new school ilke Rand.”

The bill is a priority, however, for cash-strapped state governments, and for brick-and-mortar retailers who see their online competitors competing on an uneven playing field.

Spokespeople for Alexander and Enzi, both of whom are up for reelection in 2014, didn’t return requests for comment. Other supporters of the bill in the Senate include Senators Blunt, Boozman, and Corker. Elsewhere, the bill has backing from major online retailers like Amazon, though eBay opposes it; the company argues that the threshold for companies being exempt from the taxes should be higher than the proposed $500,000 or $1 million.

The Pauls have been signaling their interest in internet issues for some time, launching a manifesto over the summer under the general battle cry of “Internet freedom,” a document that puts the case for keeping government entirely out of the online space in stark, doomsday tones.

Theirs is a political dynasty that depends more than most on the internet, the space where Ron Paul’s legions of young fans have been organizing for him for years; the Campaign for Liberty is the main organ trying to keep them on board in the wake of his final presidential campaign. Campaign for Liberty president John Tate was unavailable for an interview.

Though the bill could come up soon, its opponents say they’re playing the long game.

“It’s dangerous to let politicians in Alabama tax businesses in New York,” Norquist said. “I think we’ll stop it, but this could go on for years.”

“I don’t think these politicians know that a lot of people like to do things online,” Norquist said.