Should the Internet be Taxed?

There's Not Going to be Much Left of the Patient
Artist: Clifford Kennedy Berryman
Date: June 10, 1943

Short-sighted "brick and mortar" merchants, like kindergarten students, cry out, "It ain't fair!"  You tax me, why don't you tax them?  But what is stopping those "brick and mortar" merchants from joining the internet gold rush themselves?  If it's so unfair, then why don't they simply hop on board?

Government will find a way to tax just about anything.  If you doubt this, you might want to take a look at For Good and Evil: The Impact of Taxes on the Course of Civilization, Second Edition, by Charles Adams (Madison Books, 1999), a superb treatise on the history of taxation. 

Here are some suggested links to both sides of this question.  (We suspect you know where we stand!)

The Advisory Commission on E-commerce:   According to this site (now closed and no longer updated), "The Advisory Commission on Electronic Commerce was created by Congress and tasked with producing what is arguably the most important policy initiative of the information age: recommendations on electronic commerce and tax policy, critical issues with global implications. The Commission completed its work with its Report to Congress, which was delivered on April 12, 2000."

Should We Tax the Internet?  The Institute for Policy Innovation says, "The states don't need the additional revenue and there is no fair tax. That being the case, there is no justification for taxing Internet access or sales."

Internet Tax Nondiscrimination Act (H.R. 49 and S. 52:   Makes permanent the Internet Tax Freedom Act (previously due to sunset on November 1, 2003).

Electronic Commerce and Tax Policy.  Includes a number of pro-tax links.  Brought to you by The Tax Association (notice there's nothing here to suggest these fellows have anything to do with taxpayers - just taxes), who pride themselves for "not promot[ing] any particular tax program or policy."

Streamlined Sales Tax Project.  The Streamlined Sales Tax Project is "a cooperative effort of states and localities to respond to repeated calls for simplification of the sales tax and concerns about the impact of applying the current system to the burgeoning electronic commerce world."  (Hey, fellows - think about this.  No tax is about as simple as it gets, wouldn't you say?) How Taxation Threatens to Shut Down Commerce On The Internet.  This comprehensive article is published by Citizens Against Government Waste ("CAGW").  CAGW is "a 600,000 member, private, non-partisan, non-profit organization dedicated to educating Americans about the waste, mismanagement, and inefficiency in the federal government. Founded in 1984 by the late industrialist J. Peter Grace and syndicated columnist Jack Anderson, CAGW is the legacy of the President’s Private Sector Survey on Cost Control, also known as the Grace Commission."

Other interesting links:

New Proposals to Tax the Internet.  An alternative proposal has been developed by the e-Freedom Coalition, a group of more than thirty public policy and consumer groups, including the Washington Institute Foundation. It bases its proposal on several principles: (1) government-imposed barriers to Internet access should be torn down and future barriers prohibited; (2) consumers and businesses deserve a simplified tax code that is "usable, easy to understand and imposes the lowest possible tax burden on consumers;" and (3) consumer and taxpayer privacy should be protected.