One unique aspect of my homeschool curriculum is that students can start and
manage their own online business. Students will be responsible for deciding
what products or services to offer, getting the business up and running, and
marketing the business's products. Students and their families will get to
keep the profits made from the business. Hopefully, participants in this program
will develop a business that can either provide them with a full-time career
or a way to supplement their income.
Internet commerce is the most dynamic and rapidly growing sector of the American
economy. Not surprisingly, the Internet is also relatively free of taxes and
regulations, although many in Washington are working to change that. For example,
earlier this year the Senate passed the Marketplace Fairness Act, more accurately
referred to as the national Internet sales tax act. This bill, which passed
the Senate earlier this year, would require Internet businesses to collect
sales tax for all 10,000 American jurisdictions that assess sales taxes. Internet
business would thus be subject to audits from 46 states, six territories, and
over 500 Native American tribal nations.
Proponents of the bill deny it will hurt small business because the bill only
applies to Internet business that make over a million dollars in out-of-state
revenue. However, many small Internet businesses with over a million dollars
in out-of-state revenues operate on extremely thin profit margins, so even
the slightest increase in expenses could put them out of businesses.
Some businesses may even try to avoid increasing their sales so as to not
have to comply with the Internet sales tax. It is amazing that some of the
same conservatives who rightly worry over Obamacare's effects on job creation
and economic growth want to impose new taxes on the most dynamic sector of
the economy.
Proponents of the law claim that there is software that can automatically
apply sales taxes. However, anyone who has ever dealt with business software
knows that no program is foolproof. Any mistakes made by the software, or even
errors in installing it, could result in a small business being subject to
expensive and time-consuming audits.
Some say that it is a legitimate exercise of Congress's Commerce Clause power
to give state governments the authority to force out-of-state businesses to
collect sales taxes. But if that were the case, why shouldn't state governments
be able to force you to pay sales taxes where you physically cross state lines
to make a purchase? The Commerce Clause was intended to facilitate the free
flow of goods and services across state lines, not to help states impose new
burdens on out of state businesses.
The main proponents of this bill are large retailers and established Internet
business. Big business can more easily afford to comply with a national Internet
sales tax. In many cases, they are large enough that they already have a "physical
presence" in most states and thus already have to collect state sales taxes.
These businesses are seeking to manipulate the political process to disadvantage
their existing and future small competitors. The Internet sales tax is a bad
idea for consumers, small Internet business, and perhaps most importantly,
the next generation of online entrepreneurs.
For more information about the small business program well as all other aspects
of the Homeschool curriculum please go here.
And to purchase a copy of my new book, The School Revolution: A New Answer
for Our Broken Education System please go here.
