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Tax
Alert A bi-weekly Report by
Damon B. Ansell Volume 6 Issue 25 February 25th, 2000
Recently, the state’s Wine
& Spirits Industry Fair Dealing Act was suspended, after US
District Judge Joan Gottschall found ample reason to question the
law’s constitutionality. We
at Americans for Tax Reform (ATR) concur with her verdict, and are
urging the Legislature to repeal this unfair and unnecessary law,
which is, in effect, a punitive and irritating tax on the good
people of Illinois.
By forcing liquor
manufacturers to seek approval from the Liquor Control Commission
and demonstrate “good cause” before terminating any contract with a
distributor, those distributors had a distinct advantage over the
manufacturers. The distributors were insulated from the disciplines
that only a free market can enforce, having been sheltered by a
government agency charged with the task of severely restricting the
distribution options of the manufacturers. Any business protected by law
from the rigors of the free market need not concern itself with
efficient delivery of goods and services, providing customers with
maximum value at low cost, or consistently attending to their
customers’ needs in order to secure their continued
patronage.
Therefore, it’s scarcely
surprising that liquor prices rose upwards of $1.46 per liter after
the law’s passage—there was nothing to effectively keep the
distributors from raising their prices for distilled spirits 3%, 5%,
even 10%! In the absence of
the Wine & Spirits Industry Fair Dealing Act, a manufacturer
could have easily punished such chicanery by quickly taking its
business to another distributor. And now that the law has been
set aside for the time being, liquor prices in Illinois will have a
chance to regain their natural market equilibrium.
Kansas Alert- Karl Peterjohn
(KTN)
In legislative action today,
the State Senate rejected the Internet Tax Freedom Amendment offered
by Senator Tim Huelskamp (R-Fowler). According to Senator
Huelskamp, "This amendment was a clear opportunity to reject
Internet access taxes and E-mail taxes." The Internet Tax Freedom
Amendment, offered to Senate Bill 560, would have adopted into state
statute the current Congressional moratorium on Internet access
taxes, E-mail taxes, and discriminatory taxation on Internet sales.
This moratorium will expire October of
2001.
Instead, the Senate, by a margin of 15
to 25, clearly left open the possibility of a future special tax on
Internet access, E-mail, Internet sites, and Internet bulletin
boards. A concerned
Senator Huelskamp noted, "I can only believe that those Senators who
rejected this amendment have higher taxes in mind. And they plan on beginning
with the Internet. This
does not bode well for E-commerce in Kansas."
Senators who are in favor of
protecting the Internet from special, discriminatory taxation
include: Bleeker,
Brownlee, Clark, Donovan, Hardenburger, Harrington, Huelskamp,
Jordan, Kerr, Lawrence, Pugh, Ranson, Salmans, Tyson and
Umbarger.
Senators who rejected the
opportunity to prohibit Internet access and E-mail taxes included:
Barone, Becker, Biggs,
Bond, Corbin, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin,
Hensley, Jones, Langworthy, Lee, Morris, Oleen, Petty, Praeger,
Salisbury, Steffes, Steineger, Stephens, Vidricksen, and
Vratil.
Kentucky tax increases DOA
Kentucky governor Paul Patton
(D) admitted yesterday (2-24-00) that he had lost the battle to
increase gas taxes, sales taxes and apply a tax to glass products
($288 million increase).
Saying he had not yet lost the war, he announced a new
proposal that would apply a 7% tax on telecommunications services,
including interstate long-distance telephone calls and satellite
TV. The proposal would
raise taxes $178 million dollars. ATR opposes both tax increase proposals and is
reminding the 47 members of the Legislature who signed the Taxpayer
Protection Pledge that support for this bill would violate their
signed pledge.
For or more information contact Chad
Cowan at 202-785-0266.
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