All In   |  May 06, 2013

Internet sales tax exposes the real Washington, DC

A new bill to enforce an internet sales tax passed the Senate on Monday. Chris Hayes talks about the jumbled politics with Ryan Grim, Rachelle Bernstein, and Brian Bieron.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> just hours ago, with overwhelming bipartisan support, the senate passed the market place fairness act, which sounds nice. also known as the internet sales tax by a vote of 69 to 27. the bill empowers states to collect sales tax on purchases made on the internet and puts a huge amount of money at play. in 2012 , internet sales totaled almost $226 billion, up nearly 16% from just 2011 . the bill's proponents argue it will raise an additional $23 billion in tax revenues for states and end the unfair competitive advantage internet companies have by being able to sell the same products as brick and mortar stores, without the taxes. this bill passing the senate is important for a number of reasons, not just because if you're watching the show right now chances are you ordered something online recently. but also because any time there is a vote in the senate, not any vote, but a tax vote, a vote that will increase the amount of taxes you pay, that passes the senate with this type of majority, your ears should patrick up because something very, very strange just happened. what happened is that we witnessed one of those rare moments, when you get to open up the body and see how washington actually works with none of the ideological or partisan covering that people are there fighting over ideas. this was not a fight over ideas this was one collision of interests fighting against another collision of interests. on the one side, you have republican senators mike ensy and john thune leading the fight alongside democrats and big box retailers like walmart and target. on the other side, senators from states without sales tax like democrats ron widen and max baucus and kelly ayotte , fighting against the tax with the internet. with internet commerce giants ebay and overstock. this bill has so thoroughly jumbled political alliances that those democratic opponents made their way into a video proud by the heritage foundation .

>> the market place fairness act, but it is anything but fair.

>> i urge the senate not to move forward on the marketplace fairness act.

>> sovereignty of our states is significantly eroded.

>> could seriously harm america's small businesses .

>> unleashes all the nation's tax collectors on small internet businesses.

>> urge you to vote against this motion.

>> now, if you haven't been paying attention to this battle, you may be a little confused and that would be fair because your usual rules of thumb likely will not apply. more than 20 republicans voted for the bill, which really makes you wonder, but on other hand, grover norquist hates it. so then is this in the final analysis actually good legislation? joining me now, ryan grimm, washington bureau chief for the huffington post , michelle bernstein from the national retail federation , acts as principle for tax policy matters, and brian buron, senior director at ebay. i want to begin with you on the politics of this. how have we come to the moment when the senate votes overwhelmingly in a bipartisan fashion for a bill that will mean more taxes are paid by americans? i thought this was an anathema, what is going on?

>> you notice they're not making a huge stink about it.

>> not a lot of big celebratory press releases flooding my inbox right now.

>> campaign cash is what sets the agenda on capitol hill . ideally you would want congress to address the issues that are most pressing to the american public. whether it is the unemployment rate, syria, whatever the public sends its representatives to congress to debate and legislate on, you would think, you would hope that would be what they would do. that's not actually what happens in washington . the people that set the agenda are the ones that pay the bills. and so this need for campaign cash requires senators and members of congress to create these exceedingly complex ways to get new issues into congress that then require k street and industries to send money. it is sort of like the parasite and the host are sort of switching relationships in a strange way. so dick durbin and mike ensy, you know, they figured out, okay, we're going to work with merchants and in a couple of years ago they took on a swipe fee issue for them. the same duo, mike ensy and dick durbin what else can we do for merchants? merchants don't like it that ebay doesn't pay any sales tax . okay, we're going to pick that fight. not because they liked it, because they knew it was going to raise money .

>> i'm offended by your cynicism here.

>> they may also have liked the policy.

>> i want to talk about the policy merits. if this is good policy, how i should feel about the vote.