Cruz: ‘Height of lunacy’ to push online sales tax bill

Sen. Ted Cruz (R-Texas) said Tuesday that it would be “the height of lunacy” for Congress to greenlight an online sales tax measure before the end of the year. 

{mosads}Cruz, joined by other opponents of the Marketplace Fairness Act, derided the online sales tax proposal as essentially a giveaway to large retailers and their K Street lobbyists, and is “singularly directed against the little guys.”

“Don’t mess with the Internet,” Cruz said, citing a study that projected that the online sales tax measure would cost taxpayers $340 billion over a decade.

Opponents of the Marketplace Fairness Act got a huge boost this month when Speaker John Boehner (R-Ohio), a longtime critic of the online sales tax bill, said he wouldn’t allow the bill to move forward this year.

“I am encouraged by the Speaker’s public commitment,” Cruz told reporters after leaving the news conference where he said it would be “the height of lunacy” for the House GOP to team up with Senate Majority Leader Harry Reid (D-Nev.) on an online sales tax.

“This press conference is simply to build the coalition to hold that line,” Cruz said.

Under the Marketplace Fairness Act, states would be allowed to collect online sales tax revenue from businesses that don’t have a physical presence within their borders. States are currently barred from doing that because of a 1992 Supreme Court decision.

Backers of the measure — which include leading senators from both parties — are hoping to pair it with an extension of a moratorium on Internet access taxes, which expires on Dec. 11.

Retail advocates and the online giant Amazon are among the other supporters of the bill, who argue that Congress has been debating the matter for years. Those groups also note that the Marketplace Fairness Act would simply correct an unfair advantage that online retailers have over brick-and-mortar shops, and collect taxes that are owed but rarely collected.

But Sen.-elect Steve Daines (R-Mont.), a leading opponent of the measure, said at the news conference that the debate over the bill should take place in regular order, and not be rushed at the end of a congressional session. 

The news conference also illustrated the split among Republicans on the matter. Opponents like Mike Needham of Heritage Action noted that younger people are more likely to oppose the sales tax measure, both within the Republican Party and the general population.

But the bill’s backers noted ahead of Tuesday’s news conference that GOP state lawmakers in Cruz’s home state of Texas also support the Marketplace Fairness Act. They are joined by a number of Republican governors who believe the measure will give them more fiscal breathing room.