Politicians think that Americans aren’t giving the government enough of their hard-earned money through taxes. Accordingly, many of our elected officials want to tax what they see as a money maker: the Internet. The tax is part of the Marketplace Fairness Act (aka the Internet sales tax), which negatively affects all Americans who use the World Wide Web — especially Millennials.
My generation will be disproportionately more harmed by this new tax. Think about it: We grew up with the Internet. We buy everything from socks to toothpaste to futons online. We sell our homemade items on Etsy and resell our iPhones on eBay. This Internet sales tax is nothing more than generational theft, effectively taking money out of our pockets and giving it to the government.
The Marketplace Fairness Act (MFA)’s intent is to put online retailers on par with brick-and-mortar stores by removing their tax-free advantage; however, in practice, it does just the opposite. Currently, states are only authorized to collect sales taxes on purchases made by in-state customers. The new legislation authorizes states to collect taxes on purchases made by customers in any state. This presents a regulatory nightmare: Online retailers would subsequently have to navigate nearly 10,000 different local and state tax codes. Politicians often can’t be bothered to read their own legislation, yet they have no qualms requiring online retailers to study up on our tax code labyrinth. It’s ludicrous!
Start-ups, in most cases, do not have the capacity to understand the ins and outs of each of these specific codes. How many young entrepreneurs do you know that are also tax attorneys in their spare time? In order to comply with the MFA and avoid being audited, online businesses will undoubtedly have to hire lawyers and accountants. But start-ups have limited capital. In fact, the compliance costs of the Internet Sales Tax would range from $20,000 to $300,000 in the first year alone. Companies capable of absorbing these costs are flush with enough cash to keep lawyers and accountants on the payroll — on top of paying off big government to keep young potential competitors out of the market.
Nearly 60 percent of millennials, regardless of political affiliation, oppose the Internet sales tax. This is not a partisan issue — it is a practical one. Young people — Republicans and Democrats alike — want to be free to use the Internet and free to start new and creative businesses.
My generation is scraping to get by. 15.1 percent of us are unemployed and are desperately seeking full-time jobs. Nationally, college graduates owe an average of almost $30,000 in student loan debt. Entrepreneurial endeavors that utilize the Internet — from “side hustles” to full-time businesses — are a key to our current financial stability, freedom from debt, and future security. An Internet sales tax will lock us out of achieving these goals.
Young people are creative and entrepreneurial, but this bill will scare my generation out of starting (online) businesses and will force many of us to put our dreams on hold. The Marketplace Fairness Act does not level the playing field for all enterprises — it positions young people below big business and big government. My generation deserves a fair shot at the growing online marketplace. Our future depends on it.
