I
The Internet is a symbol and vehicle of
the rapidly changing new economy. That's why Republican Reps. John
Kasich and John Boehner are sponsoring a bill to place a permanent
moratorium on Internet taxes.
Those interested in liberty and economic
prosperity should support this bill. As Messrs. Kasich and Boehner
and multiple conservative groups recently made clear at an e-freedom
press conference, if local, state and federal governments are not
blocked from taxing the Internet, the medium of the future could
also become a new web of government intrusion on personal liberty.
That means this is a fight these lawmakers and other Americans need
to win.
A coalition of liberal governors and
mayors, Republican and Democrat, kicked off the fight by pushing a
plan to tax transactions over the Internet. The plan would
essentially levy a series of local sales taxes on nearly all
Internet transactions. To avoid a constitutional thicket leading to
confusion over which government jurisdiction will play tax
collector, the plan calls for recruiting "trusted third parties" to
collect the tax.
The plan is hopelessly complex for two
reasons: Internet sales rarely stay within one jurisdiction and
governments have little trust in anyone but themselves when it comes
to collecting taxes. Local governments are therefore going to have
to look over the cyber shoulder of whoever collects the tax, to
ensure they get their cut. Like it or not, that means creating a
mammoth database that all local governments can access. This
database will contain personal information about minute purchases of
all online shoppers. It could also lead to a bureaucrat's weighing
in on many transactions, discouraging sales of tobacco, for
example.
It is perhaps inevitable that whenever
money changes hands, politicians will want a share of it, which is
why they are now at the cyber gates demanding to be let in. But it
isn't often the horde is actually brazen enough to make pro tax-hike
statements in public, let alone put out in plain view a
comprehensive plan to effect the increases. The big spenders clearly
recognize how eager Americans are to avoid paying what they consider
excess taxes, and they fear a tax-free Internet will shut off a
large section of their revenue purse -- some estimates say current
revenue lost is about $170 million or 1 percent of sales-tax revenue
nationwide.
Indeed, the fight has already placed many
Americans in line with supply-side economics. For example, Virginia
Gov. James Gilmore has easily refuted the pro-tax claim of lost
revenue. And he has done it with a very simple argument: A tax-free
Internet will help businesses everywhere expand, and even a smaller
tax slice of a larger prospering economic pie means more money for
the government.
Another defense against taxing the
Internet is equally as simple: that the medium is still an infant
and taxing it now will kill it. Reps. Kasich and Boehner and
like-minded Americans are acknowledging, in effect, that the power
to tax is the power to destroy and that e government shouldn't have
the right to destroy an emerging economic sector.
The most compelling argument pro-taxers
have is that by allowing the Internet to be a tax-free zone, only
goods sold online can be competitive. This argument comes clothed in
concern for neighborhood stores, which are forced to sell at a
higher price because of taxes. "It's unfair" to make one group of
store owners pay and not another, the reasoning goes.
When confronted with this, Mr. Kasich
explained he believes in lowering the tax burden, not increasing it.
His point is that the government should not use one book of tax code
to justify writing a second. Although the metaphor is not his, the
pro-tax argument is akin to saying that someone should break his
left arm because the right one is already in a sling.
This fight will determine if big
government will obtain the power to follow new technologies into the
lives of all Americans. It's also a fight that clearly identifies
tax hikers. Conservatives therefore should welcome this fight and
win it. |