U.S. Postal Service Loophole Gives China the Advantage in U.S. Ecommerce

IMPORTANT: Click Here To Read this Washington Times article, “The Postal Service is losing millions a year to help you buy cheap stuff from China.  After you read the article share it.  Also share this blog post and call your U.S. Senator and Congressman immediately.
USPS Postal Service Chinese Subsidy

Apparently a Chinese based company can ship items to the United States at a lower cost than a U.S. Citizen or business can ship a package within the United States.  Our postal service has agreements (treaties) which subsidize foreign mail coming into the United States.

The Alibaba Initial Public Offering (IPO) takes place on September 19, 2014.  Take a moment to look at their marketplace AliExpress.comPay special attention to the prices they charge and the cost to have items shipped to consumers in the United States.  There is NO BUSINESS in the United States that will be able to “fairly” compete with these Chinese retailers.  This whole Efairness issue about internet sales tax is a joke.  The “real” fairness issue in our country is that we are being sold out (by our own government) to overseas retail businesses by our own laws/treaties. The subsidized U.S. Postal Service Mail loophole is what Alibaba will be exploiting to expand their business into the U.S. market and it WILL CRUSH our domestic retail market.

  • Our lawmakers need to stop wasting their time worrying about domestic online businesses and start investing their efforts on the “real” threat.
  • Businesses big and small in the USA are so worried about who will win the internet sales tax debate that they have missed the fact that Chinese business will soon dominate our market. 
  • There will be no need to worry about the debate of collecting sales taxes online anymore because MOST of the online sales will be made directly to foreign companies.
  • USA retailers will not be able to compete on price, shipping costs, and tax burden (sales tax).   

Suggestion:  States need to eliminate sales taxes and go to another form of taxation.  Eliminate the USPS subsidized mailing system that gives foreign companies an advantage over a U.S. based business.

IMPORTANT: Click Here To Read this Washington Times article, “The Postal Service is losing millions a year to help you buy cheap stuff from China.  After you read the article share it.  Also share this blog post and call your U.S. Senator and Congressman immediately.

Alibaba IPO Changes the Game on the Internet Sales Tax

Alibaba.com Goes Public September 19, 2014

Apparently a Chinese based company can ship items to the United States at a lower cost than a U.S. Citizen or business can ship a package within the United States.  Our postal service has agreements (treaties) which subsidize foreign mail coming into the United States.  Read U.S. Postal Service Loophole Gives China the Advantage in U.S. Ecommerce

ALIBABA, welcome to the United States.  On behalf of the President of the United States, Steve Womack and the American People, we welcome you to this great VIRTUAL nation.  ALIBABA, your VIRTUAL presence is welcome here.  Chinese small businesses no longer have to come and have “physical presence” here to share in the American dream. A portion of this language comes from WelcometoUSA.gov.

Alibaba IPO Marketplace Fairness Act

I read a Bloomberg Article today titled,  Alibaba Taps Chinese Diaspora as Global Amazon Battle. The article made me think about Alibaba and how they will be the biggest benefactor of the IMPACT of the Marketplace Fairness Act (Internet Sales Tax) legislation.

The Bloomberg Article showed:

  • “Hangzhou-based Alibaba said that part of its international strategy is focused on helping Chinese manufacturers and merchants to reach businesses and consumers across the world, according to its filing.”
  • “A consumer in Iowa is wary of buying products from some smaller mom and pop store in Wuhan, so how do you connect those two directly,” said Dawar. “The question is can Alibaba fill that gap, sort of the way EBay has done, through a reputation score system and monitoring of suppliers.”

My opinion:

Alibaba is going to enter the United States with hurricane strength and crush American based retail businesses. Their filing shows they are going to target the USA market/consumer. This will cut out many middleman that import goods from China and resell in the USA.  The foreign businesses that sell through Alibaba will also NOT HAVE ANY RAMIFICATIONS FOR NOT COLLECTING SALES TAXES if the MFA passes…

If I were an entrepreneur in China I would want the Marketplace Fairness Act passed.  It would give me ANOTHER advantage on price.

An example, a Chinese company selling on Alibaba (who sources their products cheaper) starts selling internationally.  The business is located only in China and lists their product for sale through Alibaba and markets their items to customers located in the United States. They then advertise SALES TAX FREE on United States orders.  The United States based Internet companies will not be able to compete: 1) on price, and 2) because of sales tax requirements of the Marketplace Fairness Act (if it passes). No sales tax is collected by the Chinese because the business is merely using Alibaba to advertise their products. They have no “physical presence” in the United States, just a VIRTUAL presence.  This would be like asking my company located only in Minnesota to charge Chinese sales taxes on items I ship and sell to a person in China.  Ya right that will happen….

I predict a major shift in buying habits.  More American’s will buy from foreign based companies.  Items will be ordered directly from the manufacturer in China.  The States that see the Marketplace Fairness Act as their cash cow will still NOT get their sales taxes on these orders.  American businesses will lose their sales and their cash flow will drop (to Chinese companies).  Therefore, shifting money out of the country and not back into the local economy.

Small Seller Exemption $1 Million in “Remote Sales”

Even if our government tries to enforce state, city, county, and Indian tribe tax collection regulations on a business only located in China they will fail.  If I were a Chinese company I would merely invoke the “small seller exemption.”  Companies that sell less then $1 million annually in “remote sales” are excluded from collecting sales taxes.  If States were able to track the “remote sales” of foreign companies (which is highly unlikely) the foreign companies would merely create another business and hide their interest in the company.  The States do not have the resources to audit or collect from a foreign business.

Wake up!  Your American Dream might just become just a dream.  It might become the Alibaba nightmare.  

Walmart Executive Given Truth Serum: The Comedy of the Marketplace Fairness Act

I think this is the best video ever produced about the Marketplace unFairness Act.

This Graphic Shows How the Marketplace Fairness Act IS a NEW TAX

If you live in a SALES TAX FREE State the Marketplace Fairness Act will create a NEW TAX for you. Here is how it will work:

New Tax Internet Sales Tax

Did Some Federal Lawmakers Participate in Tax Evasion During Campaigns?

Internet Sales Tax Remote Sellet

How many state and federal campaigns purchased items from AMAZON and actually tracked and paid the “use tax” owed on campaign purchases?  Campaigns often buy and transport Items across state lines, buy via Internet, transport items in-between different taxing jurisdictions (taxed low then brought into and “used” in high tax areas where the difference must be reported) within each state.  Also, when they are on the campaign trail they often visit one of the states that have no sales taxes.  Are they declaring the “use tax”  when they leave the state with the items and use them elsewhere?  Here is an example of State law.  In Missouri, Unions, political organizations, and home owner associations DO NOT qualify for a Missouri sales or use tax exemption.  I did a review of Minnesota law and did not find an exemption for political organizations either.  In Minnesota it specifically states, “Nonprofit organizations that qualify for federal income tax exemption are not automatically exempt from Minnesota sales tax.”

I decided to take a look at FEC.gov to see how many U.S. Congressman and Senators purchased items from AMAZON for their campaigns. Remember a campaign is basically a business that is created to get their product (the candidate) elected.  The campaigns have payroll expenses and owe various taxes.  They might be considered tax exempt at the federal level but it is the states that determine if the business qualifies for tax exempt status for sales and use tax.

My investigation revealed that many of our lawmakers bought items from AMAZON for their campaigns.  I did check a few of the expense reports and did not see any line items showing “sales or use tax” payments to their state revenue departments.  Maybe it is buried in their income tax returns.  Maybe they did pay the “use tax” and coded it as just tax BUT maybe they didn’t.  Maybe they just coded it wrong….mistakes happen…

The lawmakers I looked at support the Marketplace Fairness Act.  Many of these lawmakers have been trying to pass this deceptively named legislation for years.  Lets just say for a moment that they did not pay the “use tax” on their purchases from AMAZON. None of these lawmakers can claim ignorance of the law.  They represent states that have been fighting with AMAZON for years about the sales and “use tax.”

THE IMPACT ON SMALL BUSINESS

IF the lawmakers mentioned in the tweets at the bottom of this article DID NOT pay their “use tax” consider this:  You all ran multi-million dollar campaigns, had staff, employees and volunteers and you could not even keep your books in orderNOW you expect a small company like mine (husband and wife no other employees) to track sales taxes from over 9,600 different taxing jurisdictions.  It WILL be a huge burden on any small business that wants to sell remotely.  This law is for big business and if you vote in favor of increasing the paperwork burden on small business then you are all hypocrites.

IT IS A NEW TAX

IF the lawmakers mentioned in the tweets at the bottom of this article DID NOT pay their “use tax” consider this:  This WILL be a NEW TAX for you and 98% of people that never even heard of “use tax.”  It is also a NEW EXPENSE (my opinion it is merely a tax BUT just using a different word) for small businesses.  On $1 million dollars in gross sales the new taxes collected by my company would  result in NEW credit card fees of at least $1,150.  This is for collecting taxes for states where my business does not even have physical presence.  This legislation is a small business killer because BIG BUSINESS wants it all.  

I tweeted all of the lawmakers below asking about specific AMAZON transactions and have not heard any answer back.  Also, I think the public deserves to know if you filed it timely, NOT after you were caught or received my tweet:

Did these Federal Lawmakers Participate in Use Tax Evasion During their Campaigns?  I Don’t know.  I will let you decide…maybe they will answer…a simple YES or NO response is all I am asking for!

RETWEET THESE NOW:

U.S. Congressman Ted Poe Challenge: Marketplace Fairness Act “Use Tax” Disclosure

Lets see if we can get U.S. Congressman Ted Poe to disclose if his campaign paid the “use tax” owed to the State of Texas for some of his campaign purchases.  You can search any candidates campaign expenditures at FEC.gov.  Remember Ted Poe supports an internet sales tax to collect “use tax” evaders.  Lets see if his campaign practiced what he preaches.

Here is one question I have for him please re-tweet this:

I will post his response here if he answers:

Ted Poe said…

U.S. Senator Dick Durbin Challenge: Marketplace Fairness Act “Use Tax” Disclosure

Lets see if we can get U.S. Senator Dick Durbin to disclose if his campaign paid the “use tax” owed to the State of Illinois for some of his campaign purchases.  You can search any candidates campaign expenditures at FEC.gov.  Remember Dick Durbin supports an internet sales tax to collect “use tax” evaders.  Lets see if his campaign practiced what he preaches.

Here is one question I have for him re-tweet this:

Here is another question I have for him:

I will post his response here if he answers:

Dick Durbin said…

U.S. Senator Harry Reid Did Your Campaign Pay “Use Tax” on Amazon Purchase of $714?

Lets see if we can get U.S. Senator Harry Reid to disclose if his campaign paid the “use tax” owed to the State of Nevada for some of his campaign purchases.  You can search any candidates campaign expenditures at FEC.gov.  Remember Harry Reid supports an internet sales tax to collect “use tax” evaders.  Lets see if his campaign practiced what he preaches.

Here is one question I have for him re-tweet this:

I will post his response here if he answers:

Harry Reid said….

U.S. Senator Al Franken Challenge: Marketplace Fairness Act “Use Tax” Disclosure

Lets see if we can get U.S. Senator Al Franken to disclose if his campaign paid the “use tax” owed to the State of Minnesota for some of his campaign purchases.  You can search any candidates campaign expenditures at FEC.gov. I did not see any line items showing sales or use tax paid to Minnesota.  Remember Al Franken supports an internet sales tax to collect “use tax” evaders.  Lets see if his campaign practiced what he preaches.

Here is one question I have for him please re-tweet this:

Here is one more to tweet:

I will post his response here if he answers:

Al Franken said…

The Politics of Fairness [Guest Post]

Thomas Carlson:

Another blogger taking on the Marketplace Fairness Act. Please share, tweet and like.

Originally posted on Perspectives:

Editor’s Note:Tim Preuss is a student of economics, an advocate of free markets, and a staunch defender of personal liberty. Representing the Classical Liberal school of thought, in which limited, not more, government is the solution.

unfairWe’re all in favor of fairness, right? I mean, at least we all say publicly that we’re in favor of fairness. But politicians often use words like “fairness” in order to make a bill sound more attractive. They did it not too long ago with the “Patient Protection and Affordable Care Act”, otherwise know as Obamacare. Who wouldn’t be in favor of protecting patients? Who wouldn’t be in favor of affordable care, right?

We all know how that turned out. Millions of people had their insurance plans cancelled and rates were driven up for millions more. Not exactly protecting anyone, and there’s nothing affordable about Obamacare.

The same thing could very well happen with…

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