Republican governors across the country are pushing the federal government to give them more leeway to raise revenue through online sales taxes. In a letter last week, Iowa Gov. Terry Branstad (R) joined a growing number of governors calling for federal legislation that would close the so-called “Amazon Loophole,” which allows online retailers like Amazon to avoid collecting sales tax from their customers, giving them an unfair advantage over brick-and-mortar shops.

Currently, states cannot require online retailers to collect sales taxes unless the companies have a physical presence in the state. Nearly a dozen Republican governors have asked their state congressional delegations to support legislation addressing this inequity, The Hill reports:

Branstad’s letter of support, obtained exclusively by The Hill, comes not long after another prominent Republican governor, Chris Christie of New Jersey, also urged Congress to get moving on sales tax legislation. [...]

Christie and Branstad are among about a dozen GOP governors to back the push for online sales tax legislation. Other state leaders who are on board include Mitch Daniels of Indiana, Paul LePage of Maine and Rick Snyder of Michigan.

Virginia Gov. Bob McDonnell, another Republican, approved legislation in his state earlier this year forcing Amazon to collect sales tax. California’s legislature closed its own loophole in 2011. But states without a physical Amazon presence can’t do the same thing. Amazon has threatened states that it would file lawsuits and even move its offices and warehouses if they took similar actions.

Federal legislation to address the loophole isn’t likely to see much action in Congress, though. The House Judiciary Committee will hold a hearing on it next month, but it is not included among the House GOP majority’s legislative priorities for the year. It is unclear if the legislation would pass even if it did receive a vote, given that many congressional Republicans oppose closing the loophole.

President Obama and Senate Democrats have been trying to implement the Buffett rule, a minimum tax on millionaires, which would remedy the problem of millionaires being able to pay lower tax rates than middle class families. One state lawmaker in Iowa thinks his state needs its own version — the Branstad rule — after Gov. Terry Branstad (R-IA) was able to pay just $52 in state income taxes on his nearly $200,000 in income:

Gov. Terry Branstad’s $52 state income tax bill in 2011 is proof that fixes are needed in the tax system, Sen. Robert Hogg, D-Cedar Rapids said today.

“Some people talk about nationally we need a Buffet rule, maybe in Iowa we need a Branstad rule,” said Hogg, who additionally noted that a person making between $30,000 to $40,000 a year can expect to pay somewhere around $1,000 or more in state income tax.

Branstad was able to pay such a low amount because Iowa is one of just six states in the country that allows residents to write off their federal income tax payments from the previous year on their current year’s tax return. So Branstad was able to apply his 2010 federal income tax payments — which were paid on the salary he received from his prior job as the president of Des Moines University — to this year’s state income tax bill.

Iowa loses $642 million annually due to this provision, nearly one quarter of its total income tax revenue. More than half of the benefit of the deduction goes to the richest 5 percent of Iowans, while 76 percent of the benefits go to the richest 20 percent. “States should take a hard look at eliminating, or at least capping, their deduction because of the impact this lopsided tax policy has on state budgets and tax fairness,” the Institute for Taxation and Economic Policy wrote. Branstad’s administration called his low tax bill an anomaly. (HT: CTJ)

Iowa Gov. Terry Branstad (R)

The change would have saved Iowa families an estimated $28.5 million in taxes over two years.

Branstad vetoed that part of the bill writing that it is his desire to approach tax policy in a more comprehensive and holistic manner. [...]

Branstad additionally campaigned last year to slash Iowa’s corporate income tax rate by 50 percent, which he said would attract businesses while costing the state about $200 million a year in lost revenue. That proposal also failed.

Ironically, given Branstad’s fondness for expensive corporate tax breaks, he said he was concerned about the cost of the measure, estimated at $28.5 million a year. Branstad explained that he would only support “an overall tax reduction package that both fits within our sound budgeting principles while reducing those taxes that are impeding our state’s ability to compete for new business and jobs.”

Tim Albrecht, a spokesman for the governor, reiterated that Branstad would have supported the tax break if it had been part of a “larger effort” that included lower taxes for corporations. But since this tax break was only for poor families, Branstad suddenly abandoned his “strong support for tax relief.”

Sen. Joe Bolkcom (D), the chairman of the Senate Ways and Means Committee, points out that the EITC “is the most effective antipoverty program for working families.” Bolkcom said of Branstad’s veto, “He has again shown that he will only consider tax cuts that benefit Iowa’s wealthiest citizens and corporations.” The tax break for working families would have translated into more money for people to spend in Iowa’s economy, but Branstad apparently prefers “huge, unaffordable tax breaks for Wal-Mart and other wealthy out-of-state corporations.”

Branstad has the authority to veto individual items in spending measures. He also effectively shut down dozens of unemployment offices by vetoing language that would have prohibited the Iowa Workforce Development from closing 37 unemployment field offices across the state.

Gov. Terry Branstad (R-IA)

Wisconsin’s dispute over a union-busting bill seems to have reached an impasse, with the New York Times reporting that talks between Gov. Scott Walker (R-WI) and the state senate’s Democrats have broken down. Meanwhile, Ohio passed its union-busting bill out of the state senate last week, moving it to the Republican-dominated state house.

Another state considering a similar union-busting bill is Iowa, which tonight will hold a public hearing on legislation that would strip the state’s public employees of most of their collective bargaining rights. The bill includes a provision excluding public employees from bargaining over “outsourcing” or working to impose “any restriction” on factors the government may consider in a layoff. And Iowa’s Republicans, including Gov. Terry Branstad (R), are looking forward to their union-busting effort:

“We’re excited about that bill. It addresses a whole lot of different things,” said House Speaker Kraig Paulsen, R-Hiawatha. “We tried to be sensitive to all sides concerned.” [...]

Gov. Terry Branstad said he welcomes the proposed changes to what he called a “dinosaur” law that is creating employee costs that are unsustainable

Branstad claims that he has “no plans to seek an end to [public employees'] collective bargaining rights,” but this bill would do exactly that, as it not only removes key parts of employee compensation from the bargaining process but would allow “free agent” workers to craft their own side agreements with employers, in a more radical version of “right to work.” “[The bill] does gut collective bargaining, which we’ve had for 37 years in Iowa,” said state Rep. Pat Murphy (D).

Other Republican governors have pointed to their state’s deficit in a false attempt to justify their union-busting efforts. But Iowa can’t even do that. “”The state of Iowa is not broke. We are in the black. We will have a $252 million ending balance in June and we have $650 million in our reserve accounts in case the economy falters,” explained state senator Pat Jochum (D). Iowa’s pension system is currently 81.2 percent funded, putting it on much better footing than most of the pension systems in the country.

Iowa Republicans have already planned to cut back on their universal pre-school program in order to reduce corporate taxes. Passing their union-busting legislation would be just one more way in which they are taking advantage of national economic anxiety to push for changes that are purely ideological and anti-labor.