| Key US rep
calls for permanent ban on cybertaxes by Reporter on 11/10/99 of Reuters Topic: Taxation, Press Coverage | |
| I WASHINGTON, Nov 10 (Reuters) - A key U.S. lawmaker on Wednesday sought a permanent ban on state and local sales taxes on billions of dollars of goods sold in cyberspace, as states and municipalities readied a starkly different strategy. ``I want government at all levels to keep its hands off Internet transactions,'' Rep. John Kasich, chairman of the House Budget Committee, told a press conference. ``E-commerce is still in its infancy. It needs to be nurtured by entrepreneurs, not choked off by government,'' the Ohio Republican added. Kasich's bill, the Internet Tax Elimination Act (I-TEA), would bar sales and use taxes on goods purchased over the Internet and so-called Internet access and use taxes. In addition, the president would be required to keep Internet a ``Global Free Trade Zone'' and oppose all international tariffs and taxes on the Net, under the bill. The measure drew immediate praise from 20 anti-Web tax groups, dubbed the e-Freedom Coalition, that also called for a ban on Net sales taxes, in a 13-page letter to a congressionally appointed panel studying cybertaxes. Chaired by Virginia Gov. James Gilmore, the Advisory Commission on Electronic Commerce is set to meet Dec. 14-15 in San Francisco to hammer out draft recommendations to Capitol Hill. But seven influential state and local government groups next week are expected to propose a vastly different plan designed to boost their tax collection on Net sales by simplifying tax-collection procedures. Under the ``zero burden'' plan, an online merchant getting an order for goods would first notify an agent for the state where the buyer lives. The merchant would tell the agent three things -- the item, its price and what local jurisdiction is due the sales tax. Then the state agent, who would be considered a ``trusted third party,'' would decide if the item is taxable, the tax rate, and what total taxes are due. Kasich slammed the ``trusted third party'' concept. ``The idea that we would create a mechanism whereby merchants would align themselves with government to reveal information about consumers is something I would have read about if (George) Orwell did a follow on '1984','' he said, referring to Orwell's novel about an oppressive government's control of its citizens. Eric Schlecht, director of congressional relations for the National Taxpayers Union called the ``trusted third parties'' nothing more than ``hired hit men'' for the governments. ``They didn't want to get their hands dirty (collecting the taxes) so they are hiring a third party to do their dirty work,'' Schlect said. Gilmore, chairman of the 19-member federal commission late Tuesday, also called for a ban on state and local taxation of most goods sold over the net. In return, states would get $1.7 billion in annual perks from the federal government on the condition that they simplify byzantine tax systems. Currently, there are 7,400 states, cities, counties, parishes and other jurisdictions that levy taxes. Meanwhile, the e-Freedom Coalition plan would bar states and localities from forcing Web merchants not physically located within their jurisdictions to collect sales and use taxes. According to the coalition, the bill also would:
Tom Schatz, a spokesman for Citizens Against Government Waste, said states and localities would not miss Net sales revenues if they reduced expenditures and increased productivity. ``Look in your own backyard,'' Schatz said. ``You don't need a bureaucrat on every cybercorner trying to collect money.'' |
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