News Release: Libertarians Fight Expansion of the Sales Tax

Libertarians Fight Expansion of the Sales Tax
Tim O’Brien

CONTACT: Tim O’Brien
(248) 591-3733
(313) 562-5778

HAZEL PARK. “I don’t think the people of Michigan are eager to start paying a 6% tax every time they go to the doctor or get a haircut,” observed Libertarian Party of Michigan executive director Tim O’Brien. “But that’s exactly what could happen if Senate Bill 433 becomes law.”

The bill, ostensibly intended to make Michigan’s sales tax easier to apply to purchases made on the Internet, has been unanimously voted out of the Senate Finance committee, chaired by Sen. Joanne Emmons (R-23), and is said by insiders to be on a “fast track” to approval. Emmons is also the bill’s lead sponsor.

Currently, states are unable to compel businesses outside their borders to impose and remit their sales taxes because the Interstate Commerce clause of the US Constitution prohibits it. In order to get around this problem SB-433 proposes to have Michigan join a Compact with other states that would permit reciprocal enforcement of sales tax laws and authorize the use of a third party as collection agent. However, a first step in the process is to unify the various state’s sales and use tax codes. This will mean allowing the broadest scope necessary to accommodate all of the member states by eliminating any caps or exemptions (such as Michigan’s exemption for food and medicine) and restrictions on application (such as Michigan’s applying the tax to goods, but not services).

“As a matter of fact,” O’Brien continued, “the drafters of our Constitution even anticipated the very kind of ‘end run’ exemplified by SB-433 and included an additional prohibition against states entering into any Agreement or Compact. However, they allowed an exception if the states can get the consent of congress.”

The LPM has brought its e-mail petitioning web site back online specifically to let the public express opposition to SB-433. Visitors to the site simply type in their name and home address. The system automatically determines the appropriate legislators and sends the message — with any personalized comments the user might care to add.

“It may turn out that the congress won’t allow this anyway,” O’Brien concluded. “But we’re not going wait and see. We are going to do everything we can right here and now to have our state lead the way in a drive to make Cyberspace a free trade zone.”

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