Speeches & Floor Statements

Floor Speech: Marketplace Fairness

Posted on February 11, 2016

Mr. President, I thank the Senator from Oregon for his courtesy this morning. I appreciate the senator's remarks on allowing our different points of view to come to the floor and let's vote on it. He is speaking, of course, about the Marketplace Fairness Act, which is a 12-page bill which represents a two-word issue: states' rights.  The Majority Leader has said we'll have the ability to vote on that sometime before the end of the year. It is a bipartisan bill. It passed the Senate 2 years ago with 69 votes. It recognizes that states have the right to decide for themselves whether to collect their state sales taxes from all of the people who owe the taxes or some of the people who owe the taxes. It would allow states to do that if they simplify tax administration and exempt small online sellers from collection requirements. It would create a pathway for states and localities across the country to begin collecting an estimated $23 billion annually in uncollected taxes--taxes that are already owed. They can then use that money to balance their budget, to reduce other taxes, to pay for vital services.

I don't think Tennessee or any other state should have to play ‘Mother, may I?’' with the federal government when deciding whether to collect, or not collect, a state tax that is already owed.

I can say to our friends on both sides of the aisle, the states are not going to put up with this for very much longer. If Congress continues to be an obstacle to states making their own decisions about their tax structures, governors are going to be suing companies around the country and say, if you are going to sell in our state, you are going to collect the tax that everybody owes. At that point, all those businesses are going to run to us and say: Please pass the Marketplace Fairness Act.

I don't think we get any wiser by flying to Washington--one hour in my case--every week than the governor and the legislature about what our tax structure ought to be. We don't like an income tax in Tennessee, so we have a sales tax. We don't need any incentives from Washington to force us to pass an income tax in Tennessee.

As far as the vote today goes, this distinguished body seems to have developed a case of amnesia. We seem to have forgotten what happened in 1994. Three hundred Republicans stood on the steps of the Capitol with the Contract with America and said: If we break our contract, throw us out.

One goal of that contract was to stop Washington from imposing unfunded mandates on states. One of my most vivid memories is Senator Bob Dole running around the country with a copy of the Constitution and reading the Tenth Amendment to governors. The Tenth Amendment says: ‘‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States. . . . ’’

He said that. I was there. We were both running for president at the time. The Tenth Amendment was the heart and soul of the Contract with America. Senator Dole was good to his word. The first bill in the Senate after the Republican Revolution in 1994 was a bill prohibiting unfunded mandates. Republicans opposed unfunded mandates then. They should oppose them today. According to the Republican conference rules, ‘‘The Senate Republican Conference believes that Congress should not create new federal unfunded mandates on state and local governments.’’

However, today the vote we are about to cast breaks that promise. The customs bill has a provision that permanently extends the so-called Internet Tax Freedom Act. It prohibits state and local governments from taxing access to the Internet. It tells seven states that are currently collecting a tax that they can’t continue to collect. These seven states will lose $100 million in 2020 and several hundred million each year after that.

This was not even considered by the House or the Senate when they passed the bill. It was airdropped in violation of rule XXVIII, so the vote we are casting today, a ‘‘yes’’ vote, violates the Contract with America, violates the Senate Republican rules, and violates the Senate’s rules.

I will agree there may be a federal interest in not taxing Internet access. I agreed with that in the 1990s. Maybe for the first three years there should have been a moratorium when the Internet came along, but where will it end? If you tell states they can’t tax access to the Internet, you can also tell them they can’t tax access to telephones or food or gas because all of those are important to interstate commerce. It is wrong for Washington to be telling states what their tax structure ought to be. We are not any wiser than the governor of Tennessee. We’re not any wiser than the state legislature in Tennessee. We should leave those decisions to them.

That is my objection to the bill today. Instead of voting to impose another unfunded mandate that tells states what not to do, Congress should consider passing the Marketplace Fairness Act later this year. We should not fall into this bad habit that existed before the Republican revolution of 1994, of assuming that just because we were elected to come to Washington, suddenly we are wiser than all the governors and all of the legislatures. They are not quite as wise, we are saying. We ought not to be telling them what to do about their tax structure. We ought to leave that to them as the Senate Republican rules say, as the Contract with America said, and as the Tenth Amendment to the Constitution says. Let states do their job, and let us do our job.

I yield the floor.