The debate over the Marketplace Fairness Act was raised a few notches yesterday when Erick Erickson posted this March 19th blog entry on RedState.com, and a follow-up post yesterday that attacks “Suite 555 Canal Center Plaza”. I am not going to cover all of his objections to this bill, but instead focus on only a couple of them; If you’d like all of the details of Mr. Erickson’s opposition to this bill please follow the link and have a look.
The first thing that I would point out is there isn’t a quote or a link in either post to the text of the amendment, the Marketplace Fairness Act that was intended to be amended to the Senate budget bill. There isn’t a bill or amendment number referenced. The link that is provided, a link to an article on the DailyCaller.com, does not have this information either. I have no quick way of looking at the proposed law myself to see what it is all about. Having that lack of documentation makes me wonder if is this is about that particular amendment or something else.
Supposing that this isn’t manufactured outrage, a problem that seems to be largely out of control on the part of all warring factions of the GOP (I counted myself out a while ago), I agree in principle that the Federal Government has no place in meddling in state sales tax collection. While I would prefer a consumption tax over all other kinds of taxes as it gets away from the social engineering aspect of the current tax code and the economic problems associated with progressive income taxes and taxes on capital, I also concur with many of the comments that the Federal Government should not implement such a tax until the 16th amendment is repealed. It’s either/or, not both; unless the states want to give up all tax authority and subjugate themselves completely to the centralized leviathan.
The taxation philosophy behind the idea of federalism on which I base my opinion is nothing new. It is from the enlightenment period and it is much broader than the revolutionary slogan of “no taxation without representation” associated with it in the early to mid-18th century. The basic idea (well documented in this book, The Whiskey Rebellion by Thomas P. Slaughter) is that unless taxation authority is split into spheres of control among the various governing entities for the same geographical location, the chaos of taxation rules, regulations, and processes that often conflict with one another result in an over-taxed, over-burdened population serving too many masters at once with no understanding of how much they are paying or for what.
If the idea is that we should stick to the principles of constitutionally limited government, we should also understand and stick to the principles of federalism behind the creation of said document and the political contract therein that assigns delineated spheres of control to the Federal Government while leaving the rest to the states. If the Federal spheres are going to be blurred and expanded to everything, then there is no point in retaining state/local taxation which likely accounts for double-taxation in many aspects for the same programs. The same is true for regulatory actions, but I will stick with taxation here.
The examples for which we are taxed at all levels of government for the same programs are many. The first two or three that come to mind are education, Medicare and Medicaid and highways. We can add Obamacare to that list too. What is the ability of the average citizen to know if expenses are being double-counted, if he is double-dipped or if the tax rates are justified with accounting of the multitudes of governmental joint-ventures strewn throughout the budgets of multiple governmental agencies? There is not any way to tell. How are we to know if there aren’t some major tax-money black-holes sucking us dry for things we know not? We don’t know, can’t possibly know, and the slimy politicians want to keep it that way.
This argument folds into the present controversy by supporting the idea that the Federal Government should not be meddling in state taxation by extension to the point that the Federal Government would have all the revenue it needs if it respected constitutional boundaries of the commerce clause, the same clause I am assuming is being invoked for authority to regulate internet purchases. I can’t disagree that it likely has the authority to implement a tax of interstate internet purchases under the commerce clause, but it would have to be uniform, and cannot force anyone to pay any state. Whether these Federal politicians like Supreme Court rulings or not, we are still supposed to be governed by the rule of law; it’s their Court and they need to deal with it.
The plight of JC Penny
I’ve been following news reports on the struggles of JC Penny to turn itself around only out of peripheral personal interest. For many years it was my go-to store for a large portion of the clothes I liked to wear and I also liked their home department; I have many towels and bedding sets that I bought there in addition to professional clothing.
I stopped shopping there for economic reasons. Having been laid off and few prospects of finding another job, I no longer had need for professional clothing and I had to extend the life of white-department goods as much as possible with family finances strained. In this predicament, Wal-Mart and dollar stores became my go-to stores for just about everything I needed.
What might be fundamentally the problem for JC Penny is that it misjudged the type of customers it had, and going to an “every day low price” model isn’t what customers like me needed. Of course, it likely couldn’t or didn’t want to compete with Wal-Mart. In order to stay relevant, it likely needed to attract customers that still had money to spend rather than the squeezed middle-of-the-road, middle-class customers it had been courting. It needed much better merchandise and know-how to market to a different class of people that I do not believe it got in CEO Ron Johnson.
I’ve been to a JC Penny store recently out of a need for some clothes to wear to my new job. I found the store a complete mess. The women’s professional clothing section has rack upon rack of various items, but most if it is cheaply made, having crooked seams, pockets that pucker, and various other obvious defects. It takes quite a bit of time to sort through the unorganized maze to find acceptable items. If I had been interested in jeans or active wear, I would have left happy except for the fact that all the checkout counters have been removed, leaving customers standing around holding their selections while a clerk with a dirty stockcart checks them out with an iPhone. I dropped most of my order trying to get my wallet out of my purse and I was asked to type my email address on the tiny iPhone keypad while my order lay on the floor. I wasn’t helped to pick it up. Needless to say, I left disappointed and angry.
Perhaps on paper Ron Johnson’s boutique plan looked good; but execution of it is terrible. The company does not yet have the agreements needed to fill the whole store with individual boutiques and fills the gap with items I believe even Wal-Mart would reject. Taking the checkout stands out makes sense if each boutique is intended to have its own; but doing it beforehand results in awkward moments for customers at the point of sale, their last impression of their shopping experience, and provides opportunities for confusion which can be interpreted as rudeness.
I do not know enough about the situation to have an opinion as to whether Johnson should stay or go, but the buck must stop somewhere. I can only speak for myself and I will not go back there until the dust settles and it isn’t such a major undertaking to find what I want and to pay for it.