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For Immediate
Release: January 5, 2000
For more
information, contact: Robert Funk (202) 785-0266
Shareholders Group Calls for Tax-Free Internet
Washington -
The American Shareholders Association (ASA) announced its support
today for The Internet Tax Elimination Act (H.R. 3252), sponsored by
Congressman John Boehner (R- OH) and Congressman John Kasich
(R-OH). The proposed
legislation would establish a permanent federal moratorium on
Internet taxes.
"Stockholders have a
particular interest in maintaining the freedom of this sector," said
ASA executive director Richard Nadler. "We are involved with the
Internet both as transactors and as investors. Last year, 11 percent of all
shareholders who conducted stock transactions traded on the
internet. The NASDAQ
composite index, which reflects the growth of the technology sector,
has increased eight-fold in the past six years, from 776.80 on
January 1, 1994 to 4069.31 on December 30, 1999.
"Fifty-five million
Americans now own stocks and stock funds through work-based direct
contribution plans, and thirty million own shares through IRAs. A majority of these
investors hold internet stocks either directly, or indirectly
through dedicated technology funds or aggressive growth funds. The health of the burgeoning
Internet sector bears directly on the pensions and retirement
savings of tens of millions of Americans."
E-commerce
consumer-direct sales represented $20 billion in 1998--three-tenths
of one percent of the national total. Five presidential
candidates--Steve Forbes, Gary Bauer, Orrin Hatch, John McCain, and
George W. Bush--have announced support for an extended moratorium on
Internet taxes.
Congress has adopted
a "go-slow" approach to taxing America's fastest growing tool of
commerce. The Internet
Tax Freedom Act of 1998 placed a three-year moratorium on internet
access taxes, and established an Advisory Commission to study if and
how such taxes should be imposed. House Minority Leader Dick
Army and 35 congressmen have urged the Commission to resist the
siren song of taxation.
Supporters of
Internet taxation include several governors, and lobbyists for
counties and cities.
Led by Governor Mike Leavitt of Utah, the internet taxers
contend that such levies are a matter of fairness to local
governments and to non-net retailers.
"The facts show
otherwise," said Grover Norquist, president of Americans for Tax
Reform. "Far from
impairing sales tax collections, the growth of e-commerce has
coincided with record revenue collections. From 1981 to 1996, state
revenues increased 227 percent; local revenues, 193 percent. From 1991 to 1998,
state sales taxes increased at an average annual rate of 5.7
percent--almost twice the rate of inflation. At the same time, retail
sales grew at a healthy 5 percent annual rate."
"The debate over
Internet taxation contrasts two visions of the revolution in
communications," said Nadler.
"To supporters of markets, the Internet is the heart of a
paradigm shift, increasing economic activity in every sector it
touches. For Leavitt
and his government allies, it is just one more cow to be
milked.
"The Internet should
be treated not as a market to tax, but as a tool to make all markets
more efficient."
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