U.S. Rep. Bill Foster (D-Naperville) is urging businesspeople to write Congress in support of a federal bill that would establish a tax on Internet sales.
Foster, D-11th, also said during a speech to the Joliet Chamber of Commerce Wednesday that he believes the federal government subsidizes the movement of industry out of Illinois by taking tax dollars from the state’s residents and spending them in Southern states.
He said owners of small businesses have a lot at stake in the Marketplace Fairness Act, which would establish a system for collecting sales tax on merchandise sold on the Internet.
“It levels the playing field,” said Foster, noting that brick-and-mortar retailers lose sales when consumers buy via the Internet to avoid taxes that would be charged at a local store. “The situation now is where people go into a showroom to shop for a TV, see the model they want, and then go on the Internet to buy it to avoid the sales tax.”
Foster said the Senate has passed the Marketplace Fairness Tax, but the bill is stalled in the House with no vote scheduled. That could change, he said, if businesspeople put pressure on House representatives to pass the bill.
“This is really a situation where it’s time to make the voice of small business heard,” he said.
Foster contended that big-money lobbying groups have blocked Internet sales taxes.
Foster said the Illinois economy and the state’s residents also are at a disadvantage compared with states, mostly in the South and West, that get more federal tax dollars than they send to Washington.
Calling Illinois one of the biggest “donor states” in the country, Foster said Illinois each year sends the federal government $20 billion more than it gets back in federal spending. Much of that federal spending in the South supports military bases and government operations that generate jobs and economic benefits, he said.
“We are now redistributing the wealth from the middle class in Illinois to the middle class in Southern states,” Foster said.
He said Southern states, bolstered by the support of federal tax dollars, also are able to offer incentives to lure companies from donor states, most of which are in the Midwest and Northeast. He said the trend amounts to “the federal government subsidizing the deindustrialization of the Midwest.”
Foster said he wants to create a bloc in Congress that will represent donor states to bring back more of the federal tax money sent to Washington.