before an election and take
their candy after the election.
Posted on 06/04/2007 12:35:31 PM PDT by George W. Bush
The era of tax-free e-mail, Internet shopping and broadband connections could end this fall, if recent proposals in the U.S. Congress prove successful.
State and local governments this week resumed a push to lobby Congress for far-reaching changes on two different fronts: gaining the ability to impose sales taxes on Net shopping, and being able to levy new monthly taxes on DSL and other connections. One senator is even predicting taxes on e-mail.
At the moment, states and municipalities are frequently barred by federal law from collecting both access and sales taxes. But they're hoping that their new lobbying effort, coordinated by groups including the National Governors Association, will pay off by permitting them to collect billions of dollars in new revenue by next year.
If that doesn't happen, other taxes may zoom upward instead, warned Sen. Michael Enzi, a Wyoming Republican, at a Senate hearing on Wednesday. "Are we implicitly blessing a situation where states are forced to raise other taxes, such as income or property taxes, to offset the growing loss of sales tax revenue?" Enzi said. "I want to avoid that."
A flurry of proposals that pro-tax advocates advanced this week push in that direction. On Tuesday, Enzi introduced a bill that would usher in mandatory sales tax collection for Internet purchases. Second, during a House of Representatives hearing the same day, politicians weighed whether to let a temporary ban on Net access taxes lapse when it expires on November 1. A House backer of another pro-sales tax bill said this week to expect a final version by July.
"The independent and sovereign authority of states to develop their own revenue systems is a basic tenet of self government and our federal system," said David Quam, director of federal relations at the National Governors Association, during a Senate Commerce committee hearing on Wednesday.
Internet sales taxes
At the moment, for instance, Seattle-based Amazon.com is not required to collect sales taxes on shipments to millions of its customers in states like California, where Amazon has no offices. (Californians are supposed to voluntarily pay the tax owed when filing annual state tax returns, but few do.)
Ideas to alter this situation hardly represent a new debate: officials from the governors' association have been pressing Congress to enact such a law for at least six years. They invoke arguments--unsuccessful so far--like saying that reduced sales tax revenue threatens budgets for schools and police.
But with Democrats now in control of both chambers of Congress, the political dynamic appears to have shifted in favor of the pro-tax advocates and their allies on Capitol Hill. The NetChoice coalition, which counts as members eBay, Yahoo and the Electronic Retailing Association and opposes the sales tax plan, fears that the partisan shift will spell trouble.
One long-standing objection to mandatory sales tax collection, which the Supreme Court in a 1992 case left up to Congress to decide, is the complexity of more than 7,500 different tax agencies that each have their own (and frequently bizarre) rules. Some legal definitions (PDF) tax Milky Way Midnight candy bars as candy and treat the original Milky Way bar as food. Peanut butter Girl Scout cookies are candy, but Thin Mints or Caramel deLites are classified as food.
The pro-tax forces say that a concept called the Streamlined Sales Tax Agreement will straighten out some of the notorious convolutions of state tax laws. Enzi's bill, introduced this week, relies on the agreement when providing "federal authorization" to require out-of-state retailers "to collect and remit the sales and use taxes" due on the purchase. (Small businesses with less than $5 million in out-of-state sales are exempted.)
It's "important to level the playing field for all retailers," Enzi said during Wednesday's hearing.
While it's too early to know how much support Enzi's bill will receive, foes of higher taxation are marshaling their allies. Sen. Ted Stevens, an Alaska Republican, said Wednesday that he'd like "to see an impregnable ban on taxes on the Internet."
A taxing question
Pro-tax and antitax forces are jockeying for position before a Net access tax moratorium expires in November. Also on the table: a proposal to usher in mandatory online sales taxes.
Enzi bill: Ushers in mandatory sales taxes on Internet purchases.
S. 156: Renews expiring access tax moratorium permanently.
H.R. 1077: Renews expiring access tax moratorium permanently and eliminates grandfather provision permitting nine states to collect taxes.
H.R. 763: Renews expiring access tax moratorium permanently.
Jeff Dircksen, the director of congressional analysis at the National Taxpayers Union in Alexandria, Va., said in written testimony prepared for the hearing: "If such a system of extraterritorial collection is allowed, Congress will have opened the door to any number of potential tax cartels that will eventually harm rather than help taxpayers."
Internet access taxes
A second category of higher Net taxes is technically unrelated, but is increasingly likely to be linked when legislation is debated in Congress later this year. That category involves access taxes, meaning taxes that local and state governments levy to single out broadband or dial-up connections. (See CNET News.com's Tech Politics podcast this week with former House Majority Leader Dick Armey on this point.)
If the temporary federal moratorium is allowed to expire in November, states and municipalities will be allowed to levy a dizzying array of Net access taxes--meaning a monthly Internet connection bill could begin to resemble a telephone bill or airline ticket with innumerable and confusing fees tacked on at the end. In some states, telephone fees, taxes and surcharges run as high as 20 percent of the bill.
These fees that states levy on mobile phones, cable TV and landlines run far higher than state sales taxes at an average of 13.3 percent, cost the average household $264 a year, and total $41 billion annually, according to a report published by the Chicago-based Heartland Institute this month. Landlines are taxed at the highest rate, 17.23 percent, with Internet access being virtually tax free, with the exception of a few states that were grandfathered in a decade ago.
Dircksen, from the National Taxpayers Union, urged the Senate on Wednesday to "encourage economic growth and innovation in the telecommunications sector--in contrast to higher taxes, fees and additional regulation" by at least renewing the expiring moratorium, and preferably making it permanent. Broadband providers like Verizon Communications also want to make the ban permanent.
But state tax collectors are steadfastly opposed to any effort to renew the ban, let alone impose a permanent extension. Harley Duncan, the executive director of the Federation of Tax Administrators, said Wednesday that higher taxes will not discourage broadband adoption and his group "urges Congress not to extend the Act because it is disruptive of and poses long-term dangers for state and local fiscal systems."
Sen. Daniel Inouye, the influential Democratic chairman of the Senate Commerce committee, said: "Listening to the testimony, I would opt for a temporary extension, if at all."
If the moratorium expires, one ardent tax foe is predicting taxes on e-mail. A United Nations agency proposed in 1999 the idea of a 1-cent-per-100-message tax, but retreated after criticism. (A similar proposal, called bill "602P," is, however, actually an urban legend.)
"They might say, 'We have no interest in having taxes on e-mail,' but if we allow the prohibition on Internet taxes to expire, then you open the door on cities and towns and states to tax e-mail or other aspects of Internet access," said Sen. John Sununu, a New Hampshire Republican. "We need to be honest about what we're endorsing and what we're opposing."
OK -- so let's suppose the Federal government passes a law that allows California to collect taxes on sales made by a Seattle-based company like Amazon.com . . .
What happens when Amazon.com shuts down its Seattle operations and moves its servers to the Cayman Islands?
Why would they consider this? As long as they keep extending the 'exemption' every couple of years, they get to continually shake down businesses for their support.
So excuse me I have some Congressmen to Call....
Just goes to show how "voluntary" taxes are when we don't have a literal gun to our heads.
Internet business pay taxes like everyone else. The issue at hand is sales tax. However, if a business sells an item to someone in a state in which they have a location, they have to charge sales tax.
Otherwise, the consumer is responsible. No one, except the consumer, is skipping out on tax.
I would say under 28 (I’m 24)
I’m 24 too. I wouldn’t bother with the congressmen though, they won’t listen.
You need to reconsider that attitude or you're wasting your time on a political website. Seriously. If we're so powerless, then why even read or post?
Funny you should mention that, since I did just turn 30, I guess I do fit the billet. Yeah, my attitude has been in the dumps. Last week I was just about as mad as you could get. Sending e-mails to congress and what have you.
Right about now, I just burnt out. It seems as if they just do what they want, and throw us a bone from time to time, just to shut us up. I honestly don't think I'm wasting my time on this site. At least here I know others are just as ticked off about the same issues as I am.
Chances are my bad attitude will blow over, or the powers that be will do as they do best, and that is tell us what is best for us and then force us to pay for it.
Then people will quit buying online. I am not paying shipping charges AND taxes.
How much longer will it take for a population to realize that it’s elected representatives do not represent their interests? Once elected on false promises, these “representatives” know that they have x number of years to feather their own nests at the people’s expense. The country desperately needs a ready and expedient ‘recall system.’
The criminal fascist syndicate occupying Washington and the state capitals are sowing the seeds for their eventual destruction.
Democrats made simple, raise taxes, fund socialism and gun control.
Great comments, one question does appear what if people have jobs they have to keep that deal a lot with using the Internet? What if they are lower-middle class?
I also think that this is a step to regulating the Internet, one thing that most(if not all) people on this site fear, including me.
Obviously that Enzi is tax-happy(the worse things that “pro-tax advocates”(what a group) can do is make excuses for their new ideas) and I bet that most people won’t give a darn. After all, we’ve got a new Democratic congress because of media bias and silencing on issues of Democrat corruption(which reached to the highest levels). In fact, since the Internet is seen like TV, expect this to be another sin tax that the Nanny Staters will love and adore.
It is indeed interesting that a proponent of the ban is Ted “Set of tubes” Stevens but it is nice that two Republicans are quoted in the article as being against this ridiculous new proposal. I honestly believe that the more cookie the new Congress takes and shares it with the party hogs the more of a Civil War there will be.
I mean, if you don’t want higher taxes on everything else, why not have reduced taxation? I guess that Enzi fears the Democratic Congress like us, it is just that he swallowed some beltway swamp water.
It also makes you wonder how many new things are going to be taxed before this nightmare ends. Ooh, a tax on window binds, a tax on beds, let’s have a friggin’ tax on coffee also since people drink a lot of it. If you want taxation to pay for the state police why not loan it to the private sector? Then again I guess that shades of Robocop are a reality to many people if this happens.
And schools, one of the most BS things I’ve heard from any politician is about how every child is equal and a G-d given person. No they aren’t. I’ve been to public school and seeing some of the miserable failures, who I can write stories about, doesn’t make me optimistic.
In fact, you can learn anything from a book, being homeschooled, knowing someone who is knowledgable or exploration. For that I may conclude, no taxation, a large cut in spending on education and perhaps some police forces taken over by the private sector.
There, Enzane. Oh yeah, and I am turning 21 this month. I watched a movie called Half Nelson which did deal with a politically passionate man who felt very powerless on what to do. He basically said “I am just one man.”
Garbage! it always takes one man to build a crowd. If you think about Julius Caesar and his assassination it only took 6 or so men to kill him. To save lives it can take one doctor, one soldier, one person. Just because congress gives it to you, doesn’t mean you can take it.
I believe that the situation we are in is like rape(a pretty uncomfortable analogy that is for sure but it is eerily true), sure it might be comfortable if you are raped by the right person, but you would feel strange, beaten aback and you wouldn’t like it. You would like the rapist(also only one individual) to take control over you if you have Stockholm syndrome.
You wouldn’t mind sending the rapist to jail, but you might be worried to identify the person to did it. The condition afterwards might make you a completely different person, never the same. You will always remember the night that a thug with no name came and interfered with your privacy or your private property.
In this “powerless” idea(it is these thoughts that are part of the reason why Left-Wingers are associated with activism and how they can control so many institutions to become Politically Correct) is the idea that we are all supposed to have either Stockholm syndrome or we are in court and we cannot identify the rapist for fear that it will open up a hole, the rapist will make your life miserable or that it will send a guy who you feel sorry for to prison.
But get this, the more you don’t identify the rapist, the more he comes after you. It could also be a she. If you are a woman you might get pregnant by the rapist. You might abort the child because you feel ashamed of yourself, and you don’t want the child to feel any responsibilities and it is out of your control.
I am sorry to say but there are only two questions: we accept the rapist’s will or we don’t. We fight back against the rapist even for fear of death, or we don’t.
I am not saying violence at all. But through peaceful activism(standing in front of a congressman’s office and doing things, sending a bird dropping in the mail to a congressman with his or her picture on it) you can make a chance. As for me, I guess I am as powerless as you.
I am only 20, and I feel very uninformed sometimes. I think it would be great to send congressmen the Barrett Report, the Venona Project and the Operation Blessed July papers along with some other papers but that is all that I can do exclusively. I am a big procrastinator and I am lazy. It would be nice to do something politically, but I doubt my sincerity. I have asperger’s, poor eye sight, acne, and other bad lessons and I have very slow reflexes.
As the base we can only do what we can. The purpose of a brand of politics or a political party is to appeal to a wide swath of Conservatives, Liberals, or other political ideas. We won’t always get what we want but we can try.
That doesn’t mean that I’ll agree with everything the base does. I am a little bit fiscally Liberal(80-85% fiscally Libertarian) and Socially Conservative/Libertarian. However, most of the ideas(especially the Iraq War) is what drew me to sites like this.
You can also do something at the ballot box, I predict that when Hillary gets the nomination we will all have lots of useful things to do. I cannot imagine why the Democrats would want her as their candidate but words fail me sometimes.
If we were all to unite as young Conservatives, we can help the future of Conservatism and what we as Americans will do to perserve our system. We had to have one Conservative to roll back the tide and to stop the USA from turning into the Soviet Union and we can do it again.
I am sorry if my message is long-winded it usually is, but I tend to be cold and analytical. However if you have seen my few posts, they tend to be long-winded and analytical.
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