 | Doug Tidwell (dtidwell@us.ibm.com)
Cyber Evangelist, IBM
June 1, 2002 Lawmakers in Washington have announced that the U.S. Congress is considering a revolutionary anti-Internet tax. Though details of the plan have not been formally announced, there's no shortage of comments on the proposal. Read on for details....
WASHINGTON, D.C. -- In a move roundly praised by leaders of the Democratic and Republican parties, Representative Ariel Tramway (D-California) announced today that the U.S. Congress will soon vote on an anti-Internet tax for all non-Internet sales worldwide.
The plan is believed to be a face-saving alternative to an Internet tax. Web-based merchants currently enjoy the luxury of not charging sales tax on Internet sales, saving consumers an estimated $2.3 billion (US) annually. Implementing an Internet tax in the short term is not possible because of an Internet tax ban signed into law by then-President Clinton in 2001, and powerful e-commerce concerns have voiced strong opposition to ending the ban anytime soon.
Details of the plan were not immediately announced, but congressional insiders indicate that a tax of approximately 9 to 10 percent will be levied against all non-Internet sales of everything everywhere. "Let's say a peasant in Costa Rica sells a corn-silk doll to an eco-tourist from Brazil," said Tramway. "As it stands today, absolutely none of this transaction is subject to the U.S. tax code. Under the anti-Internet tax proposal, however, both the merchant and the consumer get the chance to contribute their fair share to the U.S. economy."
The Carter Institute for the Study of Taxation, a public policy watchdog group, expressed qualified support for the proposal. "We've long felt that the U.S. Revenue code unfairly targeted lower-income families," said spokesperson Bonita Flaxton. "The anti-Internet tax is an interesting proposal because it levels the playing field, unfairly targeting lower-income families worldwide. Assuming lobbyists and special-interest groups don't make any significant changes, this could be the most important tax reform legislation of the last 50 years."
Dr. Keene Maynard, Professor Emeritus of Economics at St. Hubbins University in Des Moines, Iowa, put the plan into historical perspective. "In the early 1980s, the Reagan administration cut taxes for the wealthy, while the Fed raised interest rates into the stratosphere. In the 90s, the Clinton administration raised taxes to cut the deficit, which led the Fed to cut interest rates. Both of those approaches have their constituencies, and choosing one or the other leads to some sort of class warfare," said Dr. Maynard. "The anti-Internet tax lets Congress get away from partisan politics, and lets us put the burden of taxation on the six billion or so people who don't live in America at all. In an election year, raising taxes on a group of people that can't vote you out of office is a shrewd strategy."
Officials at the state level, however, are less pleased. "This is clearly an attempt by the Federal Government to cut the states out of any anti-Internet revenue," said Lewis Keller, spokesperson for the Council of States, a lobbying organization that represents the interests of state governments. "The proposal would make it illegal for state governments to levy an anti-Internet tax of their own. That's unfair, and in our opinion, unconstitutional as well. You can count on us to fight this every step of the way." Keller indicated, however, that his group would quickly drop its opposition to the measure if state governments were allowed to impose their own anti-Internet taxes, particularly on residents of neighboring states.
Surprisingly, reaction from abroad was universally positive. Sir Percy Ian Smythe, MP, a member of England's House of Commons, released a short statement to the press. "Like most citizens of the world, I'm continually concerned that I'm not doing enough to help Americans consume most of the world's resources," the statement read. "The challenge facing lawmakers in Europe and the rest of the non-US world is how to channel funds from their own treasuries to the American government without raising the hackles of their countrymen. This bold new proposal from the States allows massive amounts of capital to flow into US coffers, without requiring lawmakers worldwide to take the unpopular stand of mandating a tax increase on their own citizens."
Similar sentiments were conveyed by Hamid al-Mohammed, a tribal leader in Afghanistan's interim government. "Although many of our people live in hunger, disease, and squalor, we long to be part of the American dream. While paying for that dream instead of living it isn't the part that most of us had in mind, it's at least a start. We look forward to the day when our harsh sacrifices will be repaid from the wealth, bounty, and gratitude of the American people."
As this landmark legislation sails through Congress, you can count on developerWorks to keep you abreast of the latest developments. How will this impact e-business throughout the world? How will this complicate Web site development? How will this complicate the lemonade stand on the corner? Stay tuned!
About the author
This installment of lol:> was written by Doug Tidwell, with additional reporting by Leah Ketring, of developerWorks' Washington bureau. This article was written in GNU Emacs; the author would like to state that he acquired Emacs for a total cost of $0.00, 10% of which he will gladly submit to Washington bureaucrats. |
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