The Christmas season popularity of online shopping sites is perfect evidence of why the Internet should not be taxed, says the Libertarian Party. The party also says states have no constitutional business taxing cyberspace.
"Politicians shouldn't tax the goose that is laying the golden egg for the American economy," says Libertarian Party national director Steve Dasbach, who supports a permanent Internet tax exemption. "E-commerce is creating jobs, growing the next generation of American business success stories, and generating profits of American shareholders. To keep this boom going, politicians should keep their greedy and their destructive taxes off the Internet."
Dasbach says state governments don't need the Internet tax revenues some say they desperately need; that taxing the Net could harm e-commerce; and, tracking and collecting e-taxes would be a logistical nightmare, says Conservative News Service. But Dasbach also says states taxing cyberspace is unconstitutional.
The Constitution, he says, "gives Congress the sole power to regulate interstate commerce, which means that state governments have no authority to collect taxes beyond their borders. The US Supreme Court has affirmed this principle at least twice, when it struck down laws forcing out-of-state businesses to collect sales taxes. The only good net tax is no net tax,"
The National Governors Association has called for Net taxes; its chairman, Utah Governor Mike Leavitt, is probably the idea's most vocal proponent. The group has proposed a three-year-plan to "streamline" how sales taxes are collected in the 21st Century, CNS says.
As Leavitt explains it, over the next 18-24 months, "a significant number of states will propose legislation creating a zero burden program. The zero burden legislation will create uniform product codes and sourcing rules that will initiate the process of devising standard definitions and will limit the number of times that local government can change their rates and their rules. This will all be voluntary.
"Businesses who want to use the new system," Leavitt continues, "will access it very simply. They'll simply go to a website, they will register, and, by registering, they will immediately be a zero burden participant in every participating state. Those electing to use it would then choose an administrator, referred to as a Trusted Third Party (TTP), from a list of independent organizations approved by the states to administer and to distribute sales tax collection for the seller."
The Congressionally-appointed Advisory Commission on Electronic Commerce is studying the Net tax question. They're expected to make formal recommendations by April.
Dasbach and the Libertarians, however, hope the recommendation is no Net taxes. "The Internet's current tax-free status makes it a nationwide Enterprise Zone that benefits everyone, as demonstrated by the skyrocketing sales figures this Christmas season," he tells CNS. "Instead of figuring out how to exploit the Internet for the benefit of politicians, we should consider how to protect it for the benefit of all Americans."
Americans have been estimated to have placed about 36 million gift orders online for this Christmas season, he says.
