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Business Ethics in the News
EBAY: Innocent Lobbying or Tax Evasion?
Thursday, Apr. 25, 2013
This week, eBay ramped up opposition to the Marketplace Fairness Act, a bill that would allow states to collect sales tax on goods bought from out-of-state online retailers. The campaign included a widely distributed email from eBay President John Donahoe, in which Donahoe frames the legislation as a threat to small business growth, claiming it treats small businesses and multi-billion dollar companies exactly the same. eBay is calling for a compromise of an exemption for companies with less than 50 employees or less than $10 million in out-of-state sales. It is no surprise that eBay is up in arms over the bill; its online marketplace model directly benefits from the online retailers that use its service, but there is concern that eBay is using its lobbying power to assist small businesses in tax evasion. Are eBay’s actions justified in the name of protecting small business? Or is eBay complicit in tax evasion? Also, is there anything wrong with eBay using its subscriber list for lobbying purposes?
Patrick: eBay’s plight for the mom and pop online retailers seems to check out until it comes to light that the Marketplace Fairness Act excludes companies with less than $1 million in gross sales. While companies with just over $1 million in sales aren’t going to compete with Amazon head-to-head, they are big enough to be paying taxes. There’s a lot at stake for eBay in the decision so I do not fault them for attempting to keep the status quo, but their argument just doesn’t cut it. On leveraging their email list, I’m for a free market approach: if users don’t want to receive eBay’s messages, political or otherwise, they should unsubscribe.
Kirk: It’s simply unfair to give online businesses an advantage over brick and mortar companies. It is time we abandon this charade that the economy will be hurt if we tax online businesses. If anything, the revenues collected will shore up local government, which provides the infrastructure for all economic activity. The $1 million exemption Patrick mentions gives more than enough help to the smallest businesses. I am more worried than Patrick about eBay’s political clout from using their subscriber list aggressively.