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Opinions/Editorial Internet Taxation: The Deception of "More Fair
Government" Released by Daniel B. Newby on 11/19/99 of
Sutherland
Institute
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The Internet
taxation battle has begun and sides are quickly being drawn in a
fight that will decide the future of e-commerce and the future role
of government.
Pro-tax forces
claim that government needs to tax the Internet in order to make
taxes "more fair." This is an interesting argument and appeals
to every person's desire to see government become "more fair"
with regard to its policies and procedures. But still, there is
something less than genuine within this argument. If Internet
taxation really has so much to do with fairness, why aren't these
same forces working as hard -- or even harder -- to abolish such
things as unfair government competition with the private sector, or
unfair targeted taxes like the death tax or the tax on
gas?
The answer is that
pro-tax forces are masking the real issue behind carefully
crafted deception. The true motivation behind Internet
taxation is to increase the size and power of government. The
Internet issue is not about fairness and equity for all mankind, it
is about larger bureaucracies, less freedom, and bigger
government. It is about getting the camel's nose under the tent so
that government can do to the Internet what it has attempted to do
to so many other sectors of our economy.
Citizens need to see through this deception and
remember that the primary purpose of government is not to be fair,
but to protect our basic rights to life, liberty, and property. To
do that, government must remain small enough that freedom can exist
and flourish. Whenever government growth and power rises to threaten
freedom, fairness should not suddenly become the focus, nor should
we spend our time and resources trying to get government to hurt all
people equally. The focus should always be to regain our freedom --
freedom from over-regulation, tyrannical taxes, and corrupt
government force. This concept may be painful for some citizens to
accept, but the alternative is to continue to allow, even
commission, government to find more ways to erode the freedoms
Americans still retain.
European nations moved early to incrementally regulate and
tax the Internet in their states. Today all of Europe along with the
rest of the world represent less than 20 percent of all Internet
commerce. Once government was allowed to permeate the Internet
marketplace, it quickly killed the goose that laid the golden eggs.
Here in the United States, where the Internet has been allowed to
grow virtually uninhibited by government intervention, the market
share is over 80 percent. We most certainly do not want to follow
the example of our European neighbors and trade freedom for
perceived "fairness."
Pro-tax
forces look at e-commerce and the Internet as an enemy to efficient
government, and perhaps they are right. In the early years of our
nation, there was always a frontier to run to when government became
too oppressive. That is the reason the West attracted
individualistic settlers looking for a better life. But in our day,
there is no longer a physical place to run to avoid the burdens of
high taxes and enormous regulation. Perhaps the Internet is indeed
the last bastion of freedom from oppressive government. Could it be
that Internet sales and greater Internet access are good indicators
of just how out-of-control our federal, state, and local governments
have become? Perhaps the Internet truly is one of the last enemies
to big government and high taxes.
A wonderful solution to the Internet taxation issue already
exists: lower sales taxes. Lower state and local taxes would
likely go a long way to promote fairness. In addition, lower
taxes will not do harm to Constitutional safeguards and will not
increase government power or bureaucracy. Utah could even set the
example of prosperity by lowering taxes more than any other state
and thereby draw eager businesses.
If pro-tax forces are successful, government will grow and do
to the Internet what it has already done to education, the postal
service, and health care. On the other hand, if anti-tax forces
are successful in stopping Internet taxation, government will be
forced to take yet another look at lowering
taxes.
# # # # #
#
Daniel B. Newby is the
Director of Operations & Development for the Sutherland
Institute, a Utah public policy research institute. Permission to
reprint this article in whole or in part is granted provided credit
is given to the author and to the Sutherland
Institute.
For more
information about the Sutherland Institute and/or to
order additional copies of this article, call the Institute
office, (801) 281-2081, or write: The Sutherland Institute, 111 E. 5600 South, Suite
202, Murray, UT 84107. Fax: (801) 281-2414; e-mail:
sutherland@utah-inter.net.
This article is available electronically at:
www.sutherlandinstitute.org. Nothing written here is to be
construed as necessarily reflecting the views of the Sutherland
Institute, as an attempt to aid or hinder the passage of any
legislation, or as an endorsement of any candidate or
initiative.
*********************************************************** Daniel
B. Newby Director of Operations &
Development dnewby@utah-inter.net
The Sutherland Institute: Shaping the Future of
Utah Independence Square 111 East 5600 South, Suite
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