Concurrent Budget Resolution on the Budget, Fiscal Year 2014

Floor Speech

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-NEUTRAL RESERVE FUND TO ALLOW STATES TO ENFORCE STATE AND LOCAL USE TAX LAWS.

The Chairman of the Committee on the Budget of the Senate may revise the allocations of any committee or committees, aggregates, and other appropriate levels in this resolution for one or more bills, joint resolutions, amendments, motions, or conference reports related to allowing States to enforce State and local use taxes already owed under State law on remote sales by the amounts provided in such legislation for those purposes, provided that such legislation would not increase the deficit over either the period of the total of fiscal years 2013 through 2018 or the period of the total of fiscal years 2013 through 2023.

The PRESIDING OFFICER. The Senator from Illinois.

Mr. DURBIN. Mr. President, it is my understanding under the unanimous consent request there was 40 minutes of debate allocated between those of us in support of the Marketplace Fairness Act and those who are offering amendments, Senator Ayotte and Senator Baucus; is my understanding correct?

The PRESIDING OFFICER. The Senator is correct.

Mr. DURBIN. Does the Senator mind if I say a word in opening?

The Marketplace Fairness Act is known to every Member of the Senate because I have spoken to everyone on this side of the aisle, and I think Senator Enzi and Senator Alexander have spoken to everyone on the other side of the aisle. First, give credit to the Senator from Wyoming, Mr. Enzi. He began this effort 14 years ago. He is a small businessman by profession and when he came to the Senate he saw a problem that needed to be solved and he has done yeoman's work to reach this point in the debate.

I salute him for that effort. I thank him for allowing me to join and bring it to the floor this day. Special thanks to Senator Alexander from Tennessee, who has been an able partner in allowing us to bring this matter before the Senate.

This is an issue every American can understand. We now live in the Internet age. Internet retailers are selling things over the Internet that we are buying every single day. Estimates are that $150 billion in sales are made each year over the Internet. That is part of America. It is part of our economy. But it has created an unfairness which we need to address with this legislation.

Back home in Massachusetts, in Illinois, in Tennessee, in Florida, there people with shops and businesses who get up every morning and open those shops, watch their employees file in and do business locally. When they make their sales of goods and services, they collect the sales taxes which each State requires and they collect other taxes as well. Their taxes sustain businesses, sustain schools and highways and police protection.

Unfortunately, a Supreme Court decision of almost 20 years ago, the Quill decision, basically said if we are going to require the Internet sales to collect sales tax, Congress has to do it. That is why we are tonight on this Marketplace Fairness Act.

What we are proposing is not a new tax. It is the collection of an existing tax, a sales tax that is basically owed in all but four States across the United States.

We believe this is a fair thing to do so those local businesses have a fighting chance; otherwise, they are competing against retailers who do not collect sales taxes and have that price advantage over them.

That is not fair to the businesses on Main Street across America. It isn't fair to our economy. What we are looking for is basic fairness.

At this point, I yield the floor to the Senator from Tennessee.

The PRESIDING OFFICER. The Senator from Tennessee.

Mr. ALEXANDER. Mr. President, I thank Senator Durbin and Senator Enzi for their hard work. They have taken a problem and simplified it and solved it, in my opinion. This is an 11-page bill, a rarity. It does only one thing. It gives States and State legislatures the right to decide to collect sales and use taxes that are already owed from all the people who owe it rather than just some of the people who owe it.

I have a very conservative friend over here on the Republican side who said to me: I hate taxes, but the one thing I hate worse is people who owe taxes who do not pay them. That is what this is about. But for me as a former Governor, there is something even more important; that is, the importance that we respect our constitutional framework, which says Governors and legislatures should make their own decisions about their services and their taxes.

That is the spirit of the 10th amendment. That is the spirit of this country. We don't require States to play Mother May I to the Congress of the United States. So we say to the Governor of Tennessee and the legislature of Tennessee: You decide whether you want to allow people who owe the sales tax not to have to pay it because the sellers do not collect it.

That is why many Democratic Governors support this. But a growing number, an honor role of conservative leaders and Governors, support the Marketplace Fairness Act. Al Cardenas, chairman of the American Conservative Union, supports it. He says the system we have today is outdated and unfair. After that, Governor McDonnell of Virginia, Governor Corbett of Pennsylvania, Governor Haslam of Tennessee, Chris Christie of New Jersey, Mike Pence of Indiana, Mitch Daniels, Jeb Bush, Haley Barbour, Rick Snyder--they all say: Look, we are Governors of the States. We should have the responsibility for doing that.

There have been some strange arguments made against this, such as wait for tax reform. How can you do this in tax reform if it not in the Tax Code? Have we sunk to a new low where we use the State budgets to balance our own budget?

No, this is a straightforward issue. Are we going to respect, as we swore to do when we took an oath to this constitutional framework--are we going to respect the States, recognize that States have the right to be right and the States have the right to be wrong; that Illinois is different than Tennessee and Tennessee is different than Wyoming. Governors in those States can decide what their tax structure should be, how they want to direct it, and they should decide, in my opinion, although we do not have to decide that here, that they would not pick and choose between sellers, pick and choose between taxpayers and businesses. If I walk into the National Boot Company and try on a boot and buy it, the seller collects the tax, sales tax. If I order in a catalog the seller does not. The Governor of Tennessee wants to be able to treat them the same.
I think we should do this. I fly up here every week for an hour. That hour plane ride doesn't make me any smarter than I was when I left Nashville. I think our Governor, our Lieutenant Governor, our legislature--very conservative, very Republican--understand that they do not like taxes, but they do not like, worse--they do not like, worse, people who owe taxes but do not pay them, and they want the right to fix that problem.

I am in strong support and stand with the 15 or so Senators on both sides of the aisle who endorse the Marketplace Fairness Act. I congratulate Senator Durbin and Senator Enzi for their hard work.

I yield the floor.

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Mr. ALEXANDER. Thank you, Mr. President. We talked about how difficult this is. This is a good example of why we need to get this out of Washington and back in the States. For the last 15 years the States have been figuring out how to do this. They have it pretty well worked out, and in just a 20-minute debate we make it sound complicated.

Here is how hard it is. If I buy some ice cream ingredients from Williams Sonoma, and they are in another State, I use my credit card, I put in my ZIP Code, and the software automatically tells Williams Sonoma what the sales tax is that is owed. They collect it and they wire it to the State government. That is all that happens.

This debate sounds like it happened in 1890 before the horse and buggy, before the Internet. I mean, we live in a different world.

Here is what is fair. What is fair is allowing a State--not Washington--listen to the chairman of the American Conservative Union Al Cardenas. He says:

When it comes to state sales taxes, it is time to address the area where federally mandated prejudice is most egregious--the policy towards Internet sales, the decades-old inequity between online sales and in-person sales as outdated and unfair.

If I am trying to run the International Boot Company, I have to pay a 10-percent penalty to somebody who is out of State. If somebody is out of State and by catalog or by Internet they want to sell to the 6 million people in Tennessee, they don't have to do that. They can sell in Kentucky, they can sell in Ohio, they can sell everywhere else. But if they want to sell in our State, they should live by the same rules Tennesseans do.

We don't believe in picking and choosing winners and losers. We don't believe in treating one taxpayer this way and another one that way. We don't want to pick one business this way and another that way, and we don't like the idea of Washington making us play Mother May I to come up here and ask permission to decide whether we are going to collect a sales tax from everybody who already owes it rather than just some people who owe it.

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SEC. 3__. DEFICIT-NEUTRAL RESERVE FUND FOR SCHOOL CHOICE.

The Chairman of the Committee on the Budget of the Senate may revise the allocations of a committee or committees, aggregates, and other appropriate levels in this resolution for one or more bills, joint resolutions, amendments, amendments between the Houses, motions, or conference reports related to the education of low-income children, which may include allowing funding under the Elementary and Secondary Education Act of 1965 to follow children from low-income families to the school the children attend, by the amounts provided in such legislation for those purposes, provided that such legislation would not increase the deficit over either the period of the total of fiscal years 2013 through 2018 or the period of the total of fiscal years 2013 through 2023.

The PRESIDING OFFICER. Under the previous order, there will be 2 minutes of debate equally divided prior to the vote on amendment No. 515 offered by the Senator from Tennessee, Mr. Alexander.

Mr. ALEXANDER. Mr. President, I offer this amendment on behalf of Senator Paul and myself, with Senators TOOMEY and MCCONNELL cosponsoring. It is designed to help 11 million low-income children in this country. We appropriate $14.5 billion every year through our title I Federal funding.

It is supposed to go to them but it doesn't get there. That is agreed upon by both the left and the right.

For example, Marguerite Roza, writing for the Center for American Progress, says the difference between school expenditures is often substantial, and she pointed out the money goes to schools where teachers are paid more but the children aren't necessarily the poorer children. So the poorer children--the ones we intend to help--are left in schools with less money. And sometimes the money can add up to quite a bit.

The same analysis has been found by the Fordham Foundation--I would say that is a center-right organization--because of the Federal formula we use.

The PRESIDING OFFICER. The Senator's time has expired.

Mr. ALEXANDER. So we are suggesting to let the money follow the child to the school, whether it is public or private and accredited.

I thank the Chair, and I yield the floor.

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