For Immediate Release Wednesday, February 2, 2000
For Further Information Contact: Eric Schlecht or Pete Sepp (703) 683-5700

(Alexandria, VA) -- The 300,000-member National Taxpayers Union (NTU), America’s largest and oldest grassroots taxpayer organization, announced its support for Massachusetts Governor Paul Cellucci’s strong stance today before the Senate Budget Committee against Internet taxation. "We applaud Governor Cellucci’s opposition to Internet taxation," commented NTU Director of Congressional Relations, Eric V. Schlecht. "Like most Americans, he understands that in this fast-paced economy, the last thing Americans need is a tax that picks their pockets at the speed of light."

Schlecht noted a number of reasons for his group’s support for Governor Cellucci’s proposed ban on Internet taxation:

• The existing tax base is already far too generous. Total state taxes, including traditional sales taxes, have grown at almost twice the rate of inflation and population for the past six years. Meanwhile, the federal government’s share of the economy has reached a postwar high.
• Internet businesses and "servers" can be located anywhere, and can respond to taxation by moving out of the U.S. Attempts to tax Internet services or to put up "tax gates" on millions of websites under thousands of government jurisdictions would lead to administration nightmares beyond those created even by Value Added Taxes.
• A study last year by the National Bureau of Economic Research concluded that applying existing sales taxes to the Internet would slash the number of online buyers by 25 percent and plummet purchases by 30 percent or more -- thereby damaging one of the leading sectors in America’s booming economy. Even the Federal Communications Commission agrees with this sentiment, recommending a "hands-off" approach in a recent report.

"Governor Cellucci understands that his constituents in Massachusetts should not be forced to pay sales taxes in cyberspace, where buyers and sellers are already paying their own way," Schlecht concluded. "Internet taxation is not about fairness, it’s about yet another government scheme to put even more taxpayer dollars into their overflowing coffers."

NTU is a non-profit, non-partisan citizen organization working for lower taxes, less wasteful spending, and accountable government at all levels. The group has more than 7,000 members in Massachusetts. For more information, visit www.ntu.org.