FOR IMMEDIATE RELEASE
(10/10/99) CONTACT: Sean Duffy –
717-671-1901 www.commonwealthfoundation.org
Poll Shows Pennsylvanians
Oppose New Internet Taxes (HARRISBURG) -- Warning of the dangers of imposing taxes on
the Internet, The Commonwealth Foundation today joined with more
than 20 consumer, taxpayer, and public policy organizations in
presenting a plan to keep new tax collection schemes off the
Internet, and tear down barriers to online access, and protect
consumer privacy.
The "e-Freedom Coalition," which includes The
Commonwealth Foundation, unveiled its plan at a Washington news
conference with House Budget Committee Chairman John Kasich, who
pledged to introduce legislation to make some of the Coalition's
recommendations law.
"Too many
in government see the explosive growth of the Internet and
electronic commerce as a new opportunity for tax collectors instead
of an exciting new opportunity for consumers and taxpayers," said
Commonwealth Foundation President Sean Duffy. "It's up to citizens
to demand that the Internet and our high tech economy be encouraged
to expand without the stifling effect of new taxes and new
controls."
Duffy pointed to
the results of the Foundation's recent Decision Pennsylvania poll
that nearly half of those polled -- 47 percent -- oppose new
Internet taxes.
"Clearly
Pennsylvania voters understand that slapping e-commerce with new
taxes hurts consumers, hurts business and hurts our economy," he
said.
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 reaching
$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.
Specifically, the e-freedom coalition proposes:
- a permanent ban on sales and use taxes
that specifically apply to online commerce;
- setting clear rules to ensure that
only those companies with a physical presence in a state can be
compelled to collect sales taxes;
- tearing down government-imposed taxes
and rules that drive up the cost of Internet access. The federal 3
percent excise tax on telephone service – originally levied to
help finance the Spanish-American War -- would be immediately
relegated to the ash heap if Congress decides to accept the
group's proposal;
- terminating state and local practices
of taxing telecommunications properties at higher rates than other
commercial properties would also be terminated, along with any
attempt to specifically tax Internet access (e.g., the $19.95 per
month consumers pay their Internet Service Provider for dial-up
and other access).
"In
short, our proposal hinges on many of the principles that have
prevailed in fostering the Internet's own phenomenal growth:
openness, fairness, accessibility, freedom and the minimal
involvement of political institutions," the proposal states. "We now
propose taking the Internet into the next century by increasing its
accessibility, encouraging the growth of e-commerce, and enabling
tax collection within proper constitutional guidelines."
The plan, available online at www.e-freedom.org, takes
the form of a proposal to the federal Advisory Commission on
Electronic Commerce. Congress created the temporary panel to study
tax issues presented by the growth of the Internet and online
commerce, and report its findings back to Congress next year. The
Commission will hold its second to last meeting in San Francisco
next month. More information on the Commission is available online
at www.ecommercecommission.org.
Duffy said Pennsylvanians
have the opportunity to make their views known on new Internet tax
collection schemes by sending a comment to the Commission at
comments@ecommercecommission.org.
Founded in 1988, The
Commonwealth Foundation is a statewide, non-partisan, public-policy
research organization based in Harrisburg, Pa.
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