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Mr. BAUCUS. Madam President, I think this amendment is not yet ready. It is premature. This is a very complicated question, and I think there has been a lot of easy talk and a little bit of herd instinct here that, gee, because most States are not sales tax States, therefore this amendment should be adopted.
The fact that is this is an extremely complicated question. For example, who is going to enforce this statute? Is the State of California, for example, or the State of Massachusetts going to enforce the noncollection of sales tax in another State? That is revolutionary. I cannot think of an instance where this Congress has legislated that a State can go into another State and enforce the taxation laws in that second State or when a State has empowered the State court in one State to go to another State and enforce the State taxation in that other State. It has not happened. It is not only complicated, but it is revolutionary. We have not done this before--nothing similar.
I understand the arguments of those who want to pass this. They make some good points. I have said to Senator Durbin, Senator Enzi, and others that we in the Finance Committee will very seriously take this up as soon as we can and will probably in the context of tax reform.
Let me repeat. It raises lots of questions that have not been addressed with respect to States rights; that is, the degree to which authorities in one State or courts in one State are able to go to another State and enforce State taxation issues.
Certainly, we have the full faith and credit clause in the Constitution where if someone in California, for example, gets a court order or wants to enforce a collection of tax in California, that could not be overturned in another State. That is not this question. This question is whether courts in other States and citizens in other States can go to another State and force the court in that other State to enforce that other State's taxation law. We are not talking about the taxation law in California. We are talking about the other State taxation laws. We have never done that, and I don't think it is wise to start going down that road now.
Second, different States have different State taxation laws for different reasons. Some States have income taxes. Some don't. Some have sales taxes. Some don't. The State of Montana has decided no sales tax, but we will have a significant income tax. Other
States say no income tax but a significant sales tax. That is their prerogative. That is how they want to run their State.
What does this do? This basically will have the virtual effect over a period of time of saying that all States have to have a sales tax--forget your income tax--and beyond that, it has to be the same rate. That is what is going to happen here over time if this is enacted into law. You are telling States they have to have a sales tax even if they don't want to. I don't think we want to do that, to say nothing of all the potential complications revolving around different jurisdictions.
I know the authors of this bill say: Computers can take care of it all. That is part of the problem. The computers get shut down, they get hacked. It is not the panacea a lot of people talk about. This is extremely complicated.
Sure, we have to have a full, complete hearing on this, and we should and we will. The best thing to do right now is to have this amendment withdrawn because otherwise there are going to be a lot of amendments offered today, tomorrow, and tonight that are going to show all the defects of this, and they are all going to pass, and that is going to seriously undermine and be a poison pill for this bill that is pending right now. So the best solution is to withdraw this amendment now. Let's not try to solve this here in the Senate budget resolution but, rather, it should be in the right forum in the right location, and that is the Finance Committee, with big hearings, and we will work all this out because there are very legitimate points to be made on both sides.
What bothers me is there is a lot of easy talk about how good this is, how fair it is, and nobody has thought through all the unintended consequences and all the problems that could arise, and I just started to raise a few of them.
My friend from Oregon had a good thought. What about Canada? What about direct sellers in Canada just across the border? They sell to the United States. Do we have jurisdiction over Canada? I don't think so. And I can see a burgeoning direct sales business and revenue to Canada, as my friend from Oregon thought of. There are a lot of others that we haven't thought about because it has not become ripe. It has not become ripe because we haven't had a direct hearing in a direct forum.
So I just say this is not a good idea. I understand the reasons why some advocate it, but I might say this: If we assume Federal dollars--because someone has to come up with asking Uncle Sam for Federal dollars to enforce this question in another State. Do we want that? I ask, who is the enforcer here? Is it another State? Is it Uncle Sam? I don't know. That has not been thought through.
Therefore, I strongly urge that it not be adopted. Otherwise, we are going to have a ton of amendments that are not going to be appreciated by the supporters of this bill. If they pass, it will dramatically weaken any momentum they think they are going to have. So discretion is the better part of valor. Let's withdraw this, and let's consider this calmly in the right forum.
Madam President, I yield the floor.
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Mr. BAUCUS. Madam President, I can't guarantee a time. Nobody around here can. But I think it is appropriate that this is an issue that should come up in the context of tax reform, which the committee is pressing very vigorously. We had a meeting today in the Finance Committee on the first of many steps. Regrettably, Senator Enzi was unable to make it. It was on tax reform. And that is the appropriate forum for this to be brought.
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