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| Yes | 3% | 26 votes | Total: 769 votes | |
| No | 97% | 743 votes |
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Add to FavoritesIt is inevitable as death, eventually there will be a system for taxing goods sold on the Internet.
In 1992 the Supreme court ruled that because of the complexities involved in the over 7000 jurisdictions that impose sales taxes it was almost impossible for out of state sellers to know all the rules regarding what taxes were applicable and as result states could not require out of state vendors to collect and remit those taxes.
Initially this ruling was of great benefit to the catalog business. Congress has treated e-commerce similarly.
Businesses on Main Street along with State and Local taxing authorities have come to realize it's not fair. Why should an internet business be exempt from a sales tax that is levied on the same good sold at a brick and mortar business, governmental agencies that have for years collected sales tax are having their tax bases eroded while the demand for services from the public continues.
Much of the growth in sales is e-commerce which is currently exempt from sales tax. Defenders of e-commerce will invoke the dictum that the power to tax is the power to destroy. There is some truth about the deadly consequences of taxes and regulations to inhibit the growth in business but state and local governments must balance their budgets and tax revenue will have to come from somewhere.
Taxes on services are always a possibility, as are higher taxes on alcohol, tobacco, expansion of gambling, lotteries, higher taxes on income, properties, motor vehicles and gasoline.
It's not a question of if there will be taxes on goods sold on the internet, it will be a question of when will the states and the various other taxing authorities streamline their procedures enough to pass the inevitable court challenges or the need for revenue changes the political landscape regarding the issues involved and a federal tax is imposed and rebated back to the states to cover their loss of sales tax revenue.
What will a simplified sales tax collection system mean for consumers, businesses, and governmental agencies is still and open question. Legal scholars of the issues involved agree that just because sellers are not required to collect the tax doesn't mean that consumers don't owe the tax. The sales tax laws are antiquated, unfair and inefficient as are most governmental programs.
If it were only possible to tax Internet porn, spam we could probably lower the federal income tax rates and retire some of the national debt and end the housing crisis.
Learn more about this author, John Asgeirson.
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No
A tax on use of Internet does not satisfy a single criterion for a 'good tax'.
CRITERIA FOR JUDGING A TAX
The taxes are judged on the basis of certain characteristics. A 'good tax' should be FAIR - meaning that people should pay taxes depending upon their ability to pay. It should also be NEUTRAL - meaning that two different persons with equal ability to pay should pay the same tax amount irrespective of their other circumstances and actions.
Secondly, a good tax is one that is EFFICIENT - meaning that it should collect adequate revenue with least adverse impact on the economy. A good tax should also be SIMPLE - meaning that it should be easily understood by people who need to comply with it, PREDICTABLE, in order to make an reasonable forecast that is required for tax planning and at the same time, should be easy to administer.
i. Tax on internet is not fair
A tax on using Internet is not fair, because it has no relationship with the ability to pay. It is not neutral, because it taxes a net-savvy individual much more than a computer-phobic person. It is not easy to administer because Internet connects people across political boundaries, while tax is a sovereign state matter. It is not predictable, because of fast changing technical preferences across the world, and because of the difference in the level of connectivity speeds etc, it is not even simple.
ii. Tax in internet is not efficient, simple, predictable or easy to administer
Taxes can theoretically be levied upon ANYTHING in the world. Taxes have been levied on things as strange as 'number of windows in a house', entertainment, gifts, death, food, addiction and even life. However, most taxes serve little purpose other than making our lives more complicated and difficult.
Irrespective of the part of globe in which you live, you can always find an example of a tax that has served no other purpose apart from making life of both the taxpayer and the tax administrator more complicated. It is because of such taxes that the word 'tax' has come to be as hated as it is today.
Tax on internet is neither efficient to collect significant revenue that could replace other taxes like income tax and consumption tax, nor predictable because of the simple reason that people can change their net surfing habits and avoid it. It is also not easy to administer because of the free surfing environment prevailing today, and it is not simple either because of all these complicating factors attached to it.
iii. Tax on internet does not serve any possible purpose
What is worst in case of a hypothetical tax on Internet usage is that it will not efficiently serve any of the purposes for which a tax is raised.
There are three basic reasons for levying a tax - collection of resources for public goods and service, including the government structure; redistribution of income from the rich to the poor and modifying the behavior of people. A tax on using Internet will fail on all counts. It will not raise sufficient resources for public goods and service - on the contrary it will tax a public utility. It will not lead to any redistribution of income in any way, and the only modification of behavior it will cause will be to reduce the usage of Internet, thereby reducing the rate of further growth of modern technology, and creating a hurdle in overall development of our civilization.
Clearly, such a tax will be a highly self-destructive step, which can ruin any country by pushing it a few centuries back in time and development.
Learn more about this author, V. Kumar.
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