One of the most controversial pieces of legislation currently making its way through the Senate is the Marketplace Fairness Act. In essence, it would allow states to collect taxes from online purchases even if the online store doesn’t have a physical presence in the state. Brick-and-mortar stores claim the bill levels the playing field with online retailers while opponents say it would put undue regulations on online businesses while making the tax code even more cumbersome. Guess which side the White House agrees with.

The Hill reports that the White House has formally announced its support for the Marketplace Fairness Act. The newfound endorsement was a key factor in the Senate voting in favor of the bill during a procedural vote on Monday evening.

The idea of an online sales tax is nothing new. Retail stores, represented by the National Retail Federation, have been pushing for an online sales tax bill for years after the Supreme Court ruled in Quill Corp v. North Dakota that a state could not levy sales tax against a company if it had no physical presence in the state. Numerous online retailers use this to get around sales tax, and retail stores say this gives them an unfair advantage.

The White House completely agrees. In a statement to the press on Monday, White House press secretary Jay Carney said the bill would level the playing field for brick-and-mortar stores and online retailers:

“This administration has carefully considered the legislation, and our team has met with a broad array of people on the issue. And we have heard overwhelmingly from governors, mayors and the business community on the need for federal legislation to level the playing field for our businesses and address sales tax fairness.”

The Nation Retail Federation isn’t the only group pushing for the Senate to pass the Marketplace Fairness Act. Governors around the country, including Chris Christie of New Jersey and Rick Snyder of Michigan, have voiced their support for the bill. States are hurting for revenue, and they feel that a national mandate on sales tax will bring billions of revenue back to the states. Carney echoed the governors by saying that the potential tax revenue would help states fund “K-12 education, police and fire protection, access to affordable health care, and funding for roads and bridges.”

Even if the bill is able to pass the Senate during a final vote later this week, it faces plenty of opposition. The Republican-controlled House is just one of the many challenges the Marketplace Fairness Act faces as it progresses through the legislature. Obviously online businesses are coming out against it. Ebay has been especially hostile towards the legislation, and has even started recruiting its sellers to protest the bill.

The common complaint from Ebay and other businesses opposed is that the bill would put undue burdens on online retailers. The current tax system has created a symbiotic relationship between online companies and the states. The states attract online companies to set up a physical presence in a state through a number of perks while the company brings tax revenue and jobs to the state in question. A universal online sales tax destroys that relationship by making online companies collect sales taxes for states that they receive no benefit from.

The current legislation offers sales exemptions to online businesses that make less than $1 million annually. Ebay is currently lobbying Senators to add an amendment that would up this exemption to $10 million.

One company that’s already benefiting from that symbiotic relationship has come out strongly in favor of the bill though. Amazon, which has a number of distribution centers across the country, says that it favors the bill because it creates a unified national framework for tax collection.

Despite the Senate’s overwhelming support of the bill, TechDirt points out that Sen. Ron Wyden has come out strongly against it saying that it negatively impacts innovation.

Another group standing in the bill’s way is Wall Street as it argues that the legislation, as it stands, could negatively affect financial transactions. One group in particular, the Financial Services Roundtable, says that a sales tax on financial transactions would hurt just about everyone:

“A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed.”

It should be noted that the Marketplace Fairness Act isn’t a done deal in the Senate. Monday’s vote was only procedural. Now the Senate will get to work on adding amendments to the bill with a final vote scheduled for Thursday or Friday.

Unless something disastrous happens, the bill will probably pass the Senate without much of a fight. A glowing endorsement from the White House has made sure of that.

During the debate in the Senate and the House, you’re likely to see the following argument – Do we even need an online sales tax bill? Is there any real reason to throw a bone to the retail businesses that implement stupid strategies like a $5 window shopping fee.

One compelling argument is that retail stores should find ways to better compete with online businesses. The retail store still has a few advantages over online businesses, but are they really capitalizing on those advantages?

At this point, it’s too early to tell exactly what kind of damage, if any, the Marketplace Fairness Act would cause. It could possibly do nothing, but some are right to fear that it would legitimately hurt the operations of online retailers.

Do you think that retail stores need a level playing field? Will the Marketplace Fairness Act negatively affect small online businesses?

Zach Walton is a Writer for WebProNews. He specializes in gaming and technology. Follow him on Twitter, StumbleUpon, Pinterest, and Google+ +Zach Walton

What started out as an effort by President Reagan to help poor people in rural areas have a phone in cases of emergency has mushroomed into what critics suspect is a new welfare program.

“The cost has gone from $143 million a few years ago to $2.2 billion today,” Republican Louisiana Sen. David Vitter said, noting that today’s cost is 15 times what it was.

The cost of the program increased dramatically after cellphones were added in 2008. Only low-income people on welfare and food stamps legally qualify, but some lawmakers say the program is out of control.

Sen. Claire McCaskill, a Democrat from Missouri, was incensed when she got an offer of a free phone.

“I got solicitation for a free phone at my apartment, which is certainly not a building where you’re going to have people who are qualified for free phones. … There is clearly money being wasted here.”

And Vitter adds, “The FCC, itself, said in a recent year there were 270,000 beneficiaries that had more than one of these subsidized cellphones. That’s completely against the law right there.”

Funded by a small tax on all phone bills, the program has exploded — with companies advertising free phones and offering 250 minutes.

Harold Feld of a group called Public Knowledge notes, “you have a lot of these prepaid-phone, no-contract options that are obviously very popular.”

The FCC told lawmakers the top five companies can’t verify the eligibility of 41 percent of those who get phones.

“I hear from law enforcement that these phones are often found at crime scenes and are used in drug deals,” Republican Rep. Tim Griffin of Arkansas said. “Why? It’s because you can’t trace them.”

“Just handing out phones willy nilly and allowing them to be sold on the black market,” Sen. McCaskill said. “This isn’t the way to do it, and we need to stop.”

Some recipients famously called them “Obama phones,” with one boasting to the media during the election that minorities should support the president precisely because he gave them free cellphones.

That is not true, and many are appalled by the abuse in the program. One supporter, however, argues cellphones are helpful because they’re not just for emergencies:

“It’s how we find jobs, it’s how we now participate in all the activities in the economy,” Feld said.

But McCaskill says those looking for work could simply check out a phone from the unemployment office or a shelter.

With so much abuse in the current program, she is now concerned about some new proposals: “What’s really worrisome to me is now the FCC wants to expand to this program into broadband. That’s a very bad idea, I think.”

She says such a waste of money makes taxpayers think government just isn’t paying attention. And she says the current program is so far out of control, we should simply scrap it and start over, not expand it.

By Jim Angle / Published April 22, 2013 / FoxNews.com

States could force Internet retailers to collect sales taxes under a bill that overwhelmingly passed a test vote in the Senate Monday.

Under current law, states can only require stores to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are essentially tax-free, giving Internet retailers a big advantage over brick-and-mortar stores.

The bill would allow states to require online retailers to collect state and local sales taxes for purchases made over the Internet. The sales taxes would be sent to the states where shoppers live.

The Senate voted 74 to 20 to begin debating the bill. If that level of support continues, the Senate could pass the bill as early as this week.

Supporters say the bill is about fairness for businesses and lost revenue for states. Opponents say it would impose complicated regulations on retailers and doesn’t have enough protections for small businesses. Businesses with less than $1 million a year in online sales would be exempt.

“I believe it is important to level the playing field for all retailers,” said Sen. Mike Enzi, R-Wyo., the bill’s main sponsor. “We should not be subsidizing some taxpayers at the expense of others.”

In many states, shoppers are required to pay unpaid sales tax when they file their state income tax returns. However, states complain that few people comply.

“I do know about three people that comply with that,” Enzi said.

President Barack Obama supports the bill, but its fate is uncertain in the House, where some Republicans regard it as a tax increase. Heritage Action for America, the activist arm of the conservative Heritage Foundation, opposes the bill and will count the vote in its legislative scorecard.

Many of the nation’s governors — Republicans and Democrats — have been lobbying the federal government for years for the authority to collect sales taxes from online sales, said Dan Crippen, executive director of the National Governors Association. Those efforts intensified when state tax revenues took hit from the recession and the slow economic recovery.

“It’s a matter of equity for businesses,” Crippen said. “It’s a matter of revenue for states.”

The bill pits brick-and-mortar stores like Wal-Mart against online services such as eBay. The National Retail federation supports it. And Amazon.com, which initially fought efforts in some states to make it collect sales taxes, supports it, too.

“Amazon.com has long supported a simplified nationwide approach that is evenhandedly applied and applicable to all but the smallest volume sellers,” Paul Misener, Amazon’s vice president of global public policy said in a recent letter to senators.

On the other side, eBay has been rallying customers to oppose the bill.

“I hope you agree that imposing unnecessary tax burdens on small online businesses is a bad idea,” eBay president and CEO John Donahoe said in a letter to customers. “Join us in letting your Members of Congress know they should protect small online businesses, not potentially put them out of business.”

The bill is also opposed by senators from states that have no sales tax, including Sen. Max Baucus, D-Mont., and Sen. Kelly Ayotte, R-N.H.

“Supporters of this online sales tax bill are trying to muscle it through before senators find out how disastrous it would be for businesses in their states,” Ayotte said. “I will fight this power grab every step of the way to protect small online businesses in New Hampshire and across the nation.”

Baucus said the bill would require relatively small Internet retailers to comply with sales tax laws in thousands of jurisdictions.

“This legislation doesn’t help businesses expand and grow and hire more employees,” Baucus said. “Instead, it forces small businesses to hire expensive lawyers and accountants to deal with the burdensome paperwork and added complexity of tax rules and filings across multiple states.”

But Sen. Dick Durbin, D-Ill., said the bill requires participating states to make it relatively easy for Internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive Internet sales tax revenue, so retailers don’t have to send them to individual counties or cities.

“We’re way beyond the quilt pen and leger days,” Durbin said. “Thanks to computers and thanks to software it is not that complex.”

A senior Democratic senator who helped write President Obama’s health care law stunned administration officials Wednesday, saying openly he thinks it’s headed for a “train wreck.”

“I just see a huge train wreck coming down,” Senate Finance Committee Chairman Max Baucus, D-Mont., told Obama’s health care chief during a routine budget hearing that suddenly turned tense.

Baucus is the first top Democrat to publicly voice fears about the rollout of the new health care law, designed to bring coverage to some 30 million uninsured Americans through a mix of government programs and tax credits for private insurance that start next year.

The six-term Democrat is also expected to face a tough re-election in 2014. Baucus is still trying to recover from approval ratings that nosedived amid displeasure with the health care law in his home state.

Normally low-key and supportive, Baucus challenged Health and Human Services Secretary Kathleen Sebelius at Wednesday’s hearing.

He said he’s “very concerned” that new health insurance marketplaces for consumers and small businesses will not open on time in every state, and that if they do, they might just flop because residents don’t have the information they need to make choices.

“The administration’s public information campaign on the benefits of the Affordable Care Act deserves a failing grade,” he told Sebelius. “You need to fix this.”

Responding to Baucus, Sebelius pointedly noted that Republicans in Congress last year blocked funding for carrying out the health care law, and she had to resort to raiding other departmental funds that were legally available to her.

The administration is asking for $1.5 billion in next year’s budget, and Republicans don’t seem willing to grant that either.

“I don’t know what he’s looking at,” Sebelius told reporters following her out of the room after Baucus adjourned the hearing. “But we are on track to fully implement marketplaces in Jan. 2014, and to be open for open enrollment.”

That open-enrollment launch is only months away, Oct. 1. It’s when millions of middle-class consumers who don’t get coverage through their jobs will be able to start shopping for a private plan in the new marketplaces, or exchanges. They’ll also be able to find out if they qualify for tax credits that will lower their premiums. At the same time, low-income people will be steered to government programs, mainly an expanded version of Medicaid.

But half the states, most of them Republican-led, have refused to cooperate in setting up the infrastructure of Obama’s law. Others, like Montana, are politically divided. The overhaul law provided that the federal government would step in and run the new markets if a state failed to do so. Envisioned as a fallback, federal control now looks like it will be the norm in about half the country, straining the resources of the department Sebelius leads.

Published April 18, 2013 / Associated Press

MEMPHIS, Tenn. –  Twenty-four current and former Internal Revenue Service employees have been charged with stealing government benefits, federal prosecutors said Wednesday.

The IRS employees were indicted on charges that they illegally received more than $250,000 in benefits including unemployment insurance payments, food stamps, welfare, and housing vouchers, the U.S. attorney’s office in Memphis said in a news release.

Prosecutors say 13 of the IRS employees face federal charges of lying about being unemployed while applying for or recertifying their government benefits. They each face up to five years in prison if convicted of making false statements to receive the benefits.

Eleven others face state charges of theft of property over $1,000, a felony that can carry a sentence of probation up to 12 years in prison if they are convicted.

“While these IRS employees were supposed to be serving the public, they were instead brazenly stealing from law-abiding American taxpayers,” U.S. Attorney Edward Stanton said in a statement

Those charged range in ages from 28 to 64. They include residents of Memphis, Jackson, Tenn., and Southaven, Miss.

“The taxes that we pay are supposed to support our nation and assist individuals in need, not free-loaders who are gaming the system,” said Amy Weirich, the district attorney for Shelby County.

Prosecutors scheduled, then canceled, a news conference to announce the indictments. U.S. attorney’s office spokesman Rodney King said the cancellation was due to “unforeseen events,” without elaborating.

King would not say whether the cancellation was related to the investigation into two letters sent to President Barack Obama and a Mississippi senator that indicated they contained poisonous ricin.

The FBI says the letters were postmarked Memphis.

Published April 18, 2013 / Associated Press

President Obama will propose modest changes to Social Security and other benefit programs in his 2014 budget — a gesture that is meant to soften Republicans to the idea of tax hikes, but has already drawn the ire of liberal Democrats who want the entitlement shielded.

The president plans to unveil his budget Wednesday, but a senior administration official confirmed the key details in advance. Included in the plan, which would aim to reduce the deficit by $1.8 trillion over 10 years, is a provision to lower cost-of-living adjustments to Social Security, the benefit program for retirees. This would curb the growth in benefits.

“While this is not the president’s ideal deficit reduction plan, and there are particular proposals in this plan like the (Social Security change) that were key Republican requests,” the official said. “The president felt it was important to make it clear that the offer still stands.”

The administration is clear that it is offering changes to Social Security and Medicare — the two benefit programs most important to seniors — in order to convince Republicans to accept increased revenues. The official said the plan to be unveiled next week “isn’t a menu of options for them to choose from — it’s a cohesive package.”

The proposal, though, is sure to get hit from both sides. Republicans want the Social Security change but for years have resisted new tax revenue — Obama’s plan calls for additional tax revenue, including a proposal to place limits on tax-preferred retirement accounts for top earners. Obama has also called for limits on tax deductions by top earners, a proposal that could generate about $580 billion in revenue over 10 years.

But the president could face an even tougher time selling the Social Security change to liberal members of Congress.

Sen. Bernie Sanders, I-Vt., fired off a statement Thursday responding to what was then the rumor that Obama’s budget could include the change.

“Millions of working people, seniors, disabled veterans, those who have lost a loved one in combat, and women will be extremely disappointed if President Obama caves into the long standing Republican effort to cut Social Security and benefits for disabled veterans and their survivors through a so-called chained CPI,” Sanders said. “In 2008, candidate Barack Obama told the American people that he would not cut Social Security.  Having him go back on his word will only add to the rampant political cynicism that our country is experiencing today.”

Chained CPI is the Washington term for the revised inflation adjustment that would effectively curb annual increases in a broad swath of government programs, but would have its biggest impact on Social Security.

The inflation adjustment would reduce federal spending over 10 years by about $130 billion, according to past White House estimates. Because it also affects how tax brackets are adjusted, it would also generate about $100 in higher taxes and affect even middle income taxpayers.

Obama’s budget, to be released next week, comes after the Republican-controlled House and the Democratic-run Senate passed separate and markedly different budget proposals. House Republicans achieved long-term deficit reductions by targeting safety net programs; Democrats instead protected those programs and called for $1 trillion in tax increases.

Obama’s budget proposal includes features from an offer he made to House Speaker John Boehner during fiscal negotiations last year. Those talks ultimately failed but Congress did agree to increase tax rates on top earners.

The reductions in growth of benefit programs, which would affect veterans, the poor and the older Americans, is sure to anger many Democrats.

Labor groups and liberals have long been critical of Obama’s offer to Boehner for including such a plan.

Obama’s new plan would also replace the sequester with other spending cuts. But it will steer clear of major cuts to Medicaid, including tens of billions in reductions to the health care plan for the poor that the administration had proposed only last year.

Published April 05, 2013 / FoxNews.com / The Associated Press contributed to this report.

 

“It’s about jobs. In its life, [President Obama’s health law] will create 4 million jobs — 400,000 jobs almost immediately.”

— Then-House Speaker Nancy Pelosi speaking at a Feb. 25, 2010 summit on Obama’s pending health-insurance legislation.

One of the key selling points in President Obama’s 2010 health law was that small business owners would be able to offer more insurance options to their employees.

But according to a New York Times report today, that benefit, set to kick in at the beginning of 2014, will be delayed for at least a year as federal regulators and insurance companies struggle to offer the expanded options.

This is partly a consequence of Obama relying on private insurance companies to implement his legacy law. With premiums already rising as a result of the law and set to increase by nearly a third on average with the full imposition of the new rules, insurance companies are in a strong position to demand a slowdown of the law.

With Midterm Elections just ahead and Obama still unable to rally much public support for the law, the administration is not keen to push costs even higher, especially as middle-class families are feeling the squeeze of higher taxes and higher fuel costs.

The stumbling start for Obama’s law ahead of the beginning of enrollment in its new health-insurance entitlement program is proving to be a major headache for the president. Enrollment in the federally subsidized insurance program – the centerpiece of the law – is set to begin on Oct. 1. But despite delaying the start of the program for nearly four years from the signing of the law, the federally funded insurance system does not look ready for liftoff.

With Democrats voting to cut out a key tax funding the program and the Department of Health and Human Services up to its eyeballs in delays, waivers and the difficulties of stitching together a patchwork system, the fate of what the president called “Obamacare” is looking uncertain.

Meanwhile, Senate Republicans are preparing to drag the controversial law into the budgeting process this summer. Obama is looking for a full-year fiscal plan that would provide enough borrowing authority to get to the next elections when voters might break the deadlock in Washington. The uncertainty about the law and its growing number of missed expectations enhances the ability of Senate Majority Leader Mitch McConnell and others to make the still-pending Obama entitlement part of the discussion.

Dissatisfaction with the law and the bureaucratic botch of its implementation makes Obama’s legacy program a much riper target for changes and legislative delays.

Dissatisfied Democrats may be willing to sacrifice parts of the law or slow its imposition before they are willing to meddle with popular programs like Medicare. It was politically helpful for Obama to shove the difficult or unpopular laws beyond his re-election bid. Some Senate Democrats may find it appropriate to return the favor.

The Obama administration’s decision to delay the expanded options for small business employees makes that prospect more appealing.

One of the main claims the president made in selling the law, aside from the promise of helping small businesses, was that individuals happy with their insurance and doctors would not have to make changes. Obama later clarified that he meant the government would not force citizens to change, but allowed that government regulations would cause employers, doctors and insurers to drop individuals, stop offering services or raise prices.

Obama modified his initial promise to a hope tinged with high-minded regret: “If you are happy with your plan, and if you are happy with your doctor, we don’t want you to have to change.”

But the changes are coming fast as employers prepare to jettison workers from health care plans, doctors retire or stop accepting government insurance and insurers jack up rates to cover new costs.

The delay of the expanded menu of insurance offerings will almost certainly accelerate the process.

Currently, small businesses are weighing whether to drop health insurance altogether. Obama’s law requires businesses to offer coverage of a certain caliber, above the above the basic catastrophic coverage offered by many companies. For many of them, it will be cheaper to pay the fines imposed for employers who offer no coverage at all or drop full-time workers down to part-time status to avoid the requirements.

The Congressional Budget Office already foresees some 8 million insurance customers getting dropped by employers. That’s more than before and the number will go up with this change and others still to come.

During the debate of the law, a key promise was that new regulation would require insurance companies to offer a broader menu of insurance choices to small businesses across a range of price points.

But if insurers are only offering one, more expensive health plan to small shops there will be even more employers who decide to get out of the game altogether and dump their workers onto taxpayer-subsidized insurance programs. Given the choice between that and being made part-time employees or seeing their paychecks shrink with higher premiums, many workers may prefer being dumped.

(Power Play will leave for another time the consideration of how much payroll tax fraud the new law will engender as small businesses pay “part-time” workers full-time wages. Woof.)

All of this will raise costs and dissatisfy consumers, yes. But the members of Team Obama also know that as long as implementation is lurching forward it becomes harder to uproot the system, no matter how expensive or unwieldy. That’s why Republicans are hoping to use these myriad problems and cost overruns to delay the system. Repeal or alteration remains possible as long as the system isn’t in place.

Obama’s decision to ram through the health law when it was still a jumble, especially using a procedural trick, was predicated on the belief that after he was re-elected he could put the law into place.

But the jumble persists and now threatens his legacy project.

And Now, A Word From Charles

“The Episcopal Church, it used to be said of it a generation ago it was the establishment at prayer. And now, it’s the American left at prayer. And I think that’s one of the reasons why it and the other mainline denominations are in such decline. Because if you want a message like what Reverend Leon delivered you go to a Democratic Party meeting or a pro-choice rally, you don’t go to church.”

— Charles Krauthammer on “Special Report with Bret Baier.”