OVERNIGHT MONEY: Online sales tax getting a closer look

WEDNESDAY’S BIG STORY:

Refueling debate: Online sales tax legislation, which has been shunted to the margins on Capitol Hill in recent months, is making a comeback on Wednesday.

The House Judiciary Committee will finally have its long-awaited hearing on the matter this week, after Washington’s latest snowstorm forced a delay last week.

{mosads}With the midterm election year already heating up, few around the Capitol expect much actual lawmaking the rest of the year.

But supporters and opponents of online sales tax measure will be closely watching the committee’s chairman, Rep. Bob Goodlatte (R-Va.), and other key lawmakers, including Rep. Jason Chaffetz (R-Utah), to gauge their interest in the subject and reaction to the testimony.

Goodlatte has said he opposes the Senate’s online sales tax measure, passed last year, and has released his own principles on the matter.

Chaffetz’s state is also home to Overstock.com, a key online retailer and an opponent of the Senate measure.

At issue is whether to allow states to collect sales tax revenues from online retailers that don’t have a physical location in their borders, something they’re currently barred from doing by a two-decade-old Supreme Court ruling.

Backers of legislation, like big-box stores and Amazon, say that’s an unfair advantage for Internet sellers. Opponents say the legislation would be a burden for smaller companies.

“Today’s system of sales taxation is fundamentally fair to interstate commerce and to all stakeholders, because brick-and-mortar, brick-and-click, and e-commerce businesses alike are protected from unfair out-of-state tax compliance burdens,” former Rep. Chris Cox, an adviser to NetChoice, a coalition which includes Overstock and eBay, said in his prepared testimony for the hearing.

Will Moschella of Brownstein Hyatt Farber Schreck, which represents the Simon Group, the country’s largest operator of shopping malls, counters that Simon believes the status quo is “untenable” and “that congressional inaction will cause a serious downturn in the U.S. economy.”

 

WHAT ELSE WE’RE WATCHING 

Budgeting talks: There will be plenty of familiar faces Wednesday on Capitol Hill to discuss various aspects of President Obama’s fiscal 2015 budget request.

Treasury Secretary Jack Lew heads to the Senate and House Budget committees while Secretary of State John Kerry, immersed in diplomatic negotiations with Russia over the situation in Crimea and Ukraine, talks to a House Appropriations subcommittee about his agency’s budget. 

Meanwhile, the House Ways and Means Committee will chat with Health and Human Services Secretary Kathleen Sebelius about her department’s budget although lawmakers are likely to want to talk more about ObamaCare.

House appropriators will chat with Transportation Secretary Anthony Foxx about his budget, as well as Coast Guard Commandant Adm. Robert Papp Jr. about funding for his branch of service. 

Lastly, on the House side, another House Appropriations subcommittee will talk about military construction budgets with various Defense Department officials.

On the Senate side, appropriators will talk about the budget request for the Homeland Security Department with Secretary Jeh Johnson.

Veterans Affairs Secretary Eric Shinseki will talk about his agency’s budget at the Senate Veterans’ Affairs Committee. 

Sandy recovery: Housing and Urban Development Secretary Shaun Donovan will talk on Wednesday to a Senate Banking subcommittee about the combined federal, state and local efforts on the Hurricane Sandy recovery.

Retirement security: The Senate Banking panel also will talk with various experts about whether the middle class can afford to retire.

Speaking of retirement: The Financial Services Roundtable holds a discussion about retirement issues with several lawmakers and Obama administration officials. 

Fed review: A House Financial Services subcommittee will examine how the Federal Reserve has helped allocate credit across the nation’s economy, as part of its yearlong review of the central bank. 

Student loans problems: A House Education and the Workforce subcommittee will talk about the challenges faced by the Department of Education to help borrowers who default through a rehabilitation process. 

 

LOOSE CHANGE

Hot off the presses: A piping-hot new study from the American Action Forum casts a fresh gaze at the perpetual talk of “too big to fail.”

The notion that some big banks and other institutions enjoy an implicit government backstop has lingered on Capitol Hill for years, ever since the financial collapse of 2008.

But the study from the center-right group argues that the TBTF debate is not exactly new. For example, the government stepped in and rescued the bank Continental Illinois in 1984, after it was sunk by risky corporate loans.

The study also breaks down the range of ways analysts have tried to calculate exactly how much of a perk it is to be deemed “too big to fail,” and the shortcomings contained therein.

And finally, the study argues that while Dodd-Frank proponents say the reform law has put the matter to bed, and skeptics say it is alive and well, that it is simply too soon to call it. You can give the whole study a read over here at AAF’s website.

 

SPOTTED!:  IRS Commissioner John Koskinen, chatting with Sen. Richard Shelby (R-Ala.), right off the chamber floor.

Whatever might they be talking about? Shelby is the top Republican on the Senate Appropriations Committee. Koskinen has made clear that he’s going to fight for increased funding levels for his agency, an idea that’s generally been scoffed at by congressional Republicans. 

 

ECONOMIC INDICATORS

MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume.

Treasury Budget: The Treasury Department releases its February budget data, which is used mostly by the market for year-over-year changes in receipts and outlays.  

 

WHAT YOU MIGHT HAVE MISSED

 — Senators strike deal on housing reform

— Obama mines the Gap

— Transit industry wants $11B annual funding increase

— Senate panel postpones Ukraine vote

— Issa: Lerner misled Congress

— CBO head weathers storms

 

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