Ron Paul: Internet Sales Tax Could Crush Small Businesses

by Ron Paul

One unique aspect of my homeschool curriculum is that students can start and manage their own online business. Students will be responsible for deciding what products or services to offer, getting the business up and running, and marketing the business’s products. Students and their families will get to keep the profits made from the business. Hopefully, participants in this program will develop a business that can either provide them with a full-time career or a way to supplement their income.

Internet commerce is the most dynamic and rapidly growing sector of the American economy. Not surprisingly, the Internet is also relatively free of taxes and regulations, although many in Washington are working to change that. For example, earlier this year the Senate passed the Marketplace Fairness Act, more accurately referred to as the national Internet sales tax act. This bill, which passed the Senate earlier this year, would require Internet businesses to collect sales tax for all 10,000 American jurisdictions that assess sales taxes. Internet business would thus be subject to audits from 46 states, six territories, and over 500 Native American tribal nations.

Proponents of the bill deny it will hurt small business because the bill only applies to Internet business that make over a million dollars in out-of-state revenue. However, many small Internet businesses with over a million dollars in out-of-state revenues operate on extremely thin profit margins, so even the slightest increase in expenses could put them out of businesses.

Some businesses may even try to avoid increasing their sales so as to not have to comply with the Internet sales tax. It is amazing that some of the same conservatives who rightly worry over Obamacare’s effects on job creation and economic growth want to impose new taxes on the most dynamic sector of the economy.

Proponents of the law claim that there is software that can automatically apply sales taxes. However, anyone who has ever dealt with business software knows that no program is foolproof. Any mistakes made by the software, or even errors in installing it, could result in a small business being subject to expensive and time-consuming audits.

Some say that it is a legitimate exercise of Congress’s Commerce Clause power to give state governments the authority to force out-of-state businesses to collect sales taxes. But if that were the case, why shouldn’t state governments be able to force you to pay sales taxes where you physically cross state lines to make a purchase? The Commerce Clause was intended to facilitate the free flow of goods and services across state lines, not to help states impose new burdens on out of state businesses.

The main proponents of this bill are large retailers and established Internet business. Big business can more easily afford to comply with a national Internet sales tax. In many cases, they are large enough that they already have a “physical presence” in most states and thus already have to collect state sales taxes. These businesses are seeking to manipulate the political process to disadvantage their existing and future small competitors. The Internet sales tax is a bad idea for consumers, small Internet business, and perhaps most importantly, the next generation of online entrepreneurs.


  • How or government ever became so dishonest and dis functional is beyond me. For too many years now, the American people have taken their freedom and liberty for granted, believing that the powers to be” had their best interest at hart. The governments roll is to help protect the people against cheats and crooks, not to be criminals themselves.

  • Surfisher

    With Obama’s DISAPPROVAL rating climbing through the roof — now is the perfect storm to go after all of Barrack Hussein’s perfidies full throttle!

    Let’s get this anti-American Usurper of our White House impeached, and hopefully send to jail for a long, long time.

    This will be a good start:

    Contact Texas congressman Steve Stockman and urge him to start an immediate investigation of Barrack Hussein’s failure to provide naught but a forged Birth Certificate online!

    Texas congressman Steve Stockman:

    326 Cannon House Office Building
    Independence Avenue
    Washington, DC 20515
    Phone: 202-225-1555
    Fax: 202-226-0396
    Hours: M-F 9-5:30pm

    420 Green Avenue
    Orange, TX 77630
    Phone: 409-883-8075
    Fax: 409-886-9918
    Hours: M-F 8-4:00pm

    web page:

    Make this short video VIRAL!

  • There will be plenty of people who buy into the bullshit that this is fair and needs to happen in order to ensure market equality. I think there are people in power who think that it’s easier to weigh people down than lift people up, and they’re agenda is to impress their supports by how equal everyone will be because of it.

  • “Ok reprocessing nuclear waste by how?”
    By the same methods the rest of the world uses.
    Did you watch the video?
    “you assume they can make a profit”
    So you admit you did not watch the video.
    Short answer: It’s cheaper to reprocess than to make the fuel in the first place, and there are lots of profitable byproducts of reprocessing in addition to the reusable Uranium.
    I’m not assuming anything.

  • Ok reprocessing nuclear waste by how? Bombarding it with neutrons?
    That’s expensive as shit you assume they can make a profit.

  • “How can a private company make money through the market by storing nuclear waste?”
    Reprocessing, which is illegal in the US.
    “What if a large percentage of people are assholes”?
    Oh no! What if a large percentage of people are assholes and then vote? Oh no! Democracy is too dangerous, that can never work!
    But seriously, if people cannot be trusted and govt is just people, then govt cannot be trusted. If people CAN be trusted, no govt is needed.

  • Australia is interesting in their city planning and how they vote on projects they want but in the end there still some force whether you had a vote on the exact purpose or not. How can a private company make money through the market by storing nuclear waste?
    What if a large percentage of people are assholes and refuse to chip in for that when their is no demand to do it?

  • Classic cronyism going on with this.

  • “The only way there can be no taxes”
    The way to not have any taxes is to have all services provided privately. People pay for what they use.
    So-called “market failures”, such as free riders, is a chimera created to distract people. Private industry deals with “free riders” every day, quietly and effectively.
    No public service is not provided better, cheaper, or both, privately.
    Abolish govt service, and let the market work.

  • The only way there can be no taxes is if society is so technologically advanced we
    don’t need a monetary system anymore like Star Trek which will happen one day probably after the
    NWO goes to solitary confinement, eats GMO food with fluoridated water and get flu shots with cancer viruses.

  • Zeitgeist? Utopian Communist claptrap.
    Although as you say zero taxation may never be reached, one must always keep the goal in mind. No Coercion.

  • I take it you’re talking about the Zietgeist Movement because that’s the only way that would ever happen

  • What is needed is no tax at all.

  • What is needed is no tax at all.

  • We need the Fairtax (better than flat tax) immediately enough of the circus