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Release COMMONWEALTH FOUNDATION URGES RIDGE ADMINISTRATION TO REJECT GOVERNORS' ASSOCIATION PLAN TO TAX THE INTERNET Released by Sean Duffy on 11/19/99 of Commonwealth Foundation |
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FOR IMMEDIATE RELEASE
(11/16/99) CONTACT: Sean Duffy – 717-671-1901 www.commonwealthfoundation.org (HARRISBURG) – Stressing the need to protect Pennsylvania taxpayers from a wave of new sales taxes imposed on them by other states, The Commonwealth Foundation today sharply criticized a proposal offered by the National Governors Association (NGA) that would increase taxes, dampen online commerce and threaten consumer privacy. The Foundation urged Gov. Tom Ridge to reject the NGA proposal. "It's a shame that on the threshold of the holiday buying season – a season that promises to set new records for Internet commerce – the National Governors Association has devised a plan to put a lump of coal in merchant's stockings," said Commonwealth Foundation President Sean Duffy. "The NGA knows that taxing the Internet will cut online commerce by nearly one-third, but their focus is making sure that they can shake every cent they can out of American consumers." Duffy said the NGA proposal, unveiled today by Utah Gov. Mike Leavitt, would impose a new national scheme to collect state taxes on every Internet purchase, constrict citizen access to Internet providers and jeopardize consumers' privacy. In contrast, proposals from Virginia Gov. Jim Gilmore and the national E-Freedom Coalition, of which The Commonwealth Foundation is a founding member, would make permanent the current ban on new Internet taxes and tear down government-imposed taxes and rules that drive up the cost of Internet access. "The Ridge Administration has made great strides in changing Pennsylvania's image from a state that ducks innovation to one that embraces the new digital economy and welcomes technology entrepreneurs," Duffy said. "The NGA's proposal to hit the Internet with new taxes is completely at odds with the pro-growth efforts Governor Ridge has made to bring technology companies to the Keystone State." Internet commerce is a growing part of Pennsylvania's economy. The state Department of Revenue estimates that Internet sales to Pennsylvania consumers totaled more than $600 million in 1998, with Internet sales to businesses in the state reaching $3.3 billion that same year. The Department estimates that those figures will grow substantially in coming years. Nationally, experts estimate Internet trade will reach $1.3 trillion by 2002. The International Data Corp. recently estimated that electronic commerce sites on the Internet will more than double to 1.2 million by 2003. Duffy said taxing the Internet could severely cripple this growth, which has aided state governments – including Pennsylvania – in building large surpluses this decade. A study by the National Bureau of Economic Research showed that imposing new tax schemes, such as the NGA's, could cut online commerce by up to 30 percent. The Commonwealth Foundation is a founding partner in the E-Freedom Coalition (www.e-freedom.org), an organization of more than two dozen consumer, taxpayer and public policy organizations that has presented a plan to keep Internet taxes OFFline. Founded in 1988, The Commonwealth Foundation is a statewide, non-partisan, public-policy research organization based in Harrisburg, Pa. * * * * | |
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