Grover Norquist, President of Americans for Tax Reform, recently testified before the House Subcommittee on the Regulatory Reform, Commercial and Law on the Judiciary on tax nexus. Unfortunately Mr. Chaffetz’ bill does not maintain the physical nexus standard and sets a precedent of taxation without representation.
The following statements come from Mr. Norquist’s testimony that relate to tax nexus issues:
One of the challenges we have in taxation is that politicians love to tax people who cannot vote against them. States can raise taxes on the people who live and work in that state. But to export that tax to other people to reduce the opposition to tax increases is problematic.
Exporting taxes violates the whole concept of taxation without representation, and undermines competition between the states.
The discussion that Chairman Goodlatte has put forward on hybrid origin I think is a very good start. Origin sourcing, which clarifies that physical presence in a state is the law that governs the tax code, is a very good discipline on potential abuses by state and local government.
Cities and states that have taxed their citizens and businesses so badly that they fled to other states are now looking for a way to throw a harpoon into those that have escaped and try to drag back tax dollars. That has to stop.
To view the coalition letter ATR has signed in opposition to this Bill click here.