SCN: Net taxation

[Steve]

x-no-archive: yes

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(Michael Kinsley, WA Post)---As a journalist, I've been cajoled, 
flattered and importuned (not to mention insulted, ignored, bored and 
patronized) by politicians. But getting pandered is a whole new 
experience. The main difference is that political pandering goes 
beyond ego massage to give you something you really want, 
usually money.  

To what do I owe the honor? I work on the Internet. Therefore I am 
"providing Americans with more freedom" and "creating new jobs 
and new opportunities for all Americans" and walking on water while 
turning it into wine and so on. No, no, don't thank me. That's a job 
for House Majority Leader Dick Armey, who last week unveiled his 
"eContract 2000" - some flattering blather plus 10 bits of hard-core 
pandering. The eContract is, of course, an hommage to the Contract 
With America that God gave to Newt Gingrich in 1994.  

Crude materialists might suppose this is just about campaign 
fundraising. But it is not. Politicians of both parties sense the 
spotlight focusing elsewhere and, like old vaudevillians, are trying 
to sing and dance their way back in. They start by humbly 
proclaiming their own tiny irrelevance to this huge force 
transforming our blah blah blah, and then they proceed to rack their 
brains for legislation that will make them relevant. The denizens of e-
world tend to agree about our own importance and the irrelevance of 
politics and government, but we are not above accepting or even 
soliciting a pander now and then.  

Armey's "eContract" naturally promises to ban (for five years) all 
state and local taxes on Internet transactions. "Big government 
bureaucrats see [Internet shopping] as another opportunity to levy a 
tax," the document explains. Since there is no plausible argument 
why a purchase should be exempt from sales tax just because it is 
over the Internet, the eContract makes none. Nor does it explain why 
Republicans - who haven't yet called for the nation's nuclear arsenal 
to be turned over to the states, but almost - think state sales taxes, 
of all things, are a matter about which Washington should get to 
decide. Or why state legislators are "big government bureaucrats" 
who must be crushed by the feds in this case, but wise Solons who 
will save us from federal overreaching on every other issue.  

Or why, if "we assert that freedom is the answer, not government 
intervention," the government should intervene to give retailers on 
the Internet an artificial price advantage over retailers with stores 
you can walk into. Or why, if the Internet is so miraculous and 
powerful, it should need this kind of unfair advantage. (Or why 
freedom will stop being the answer in five years.)  

Here we have a pander of laboratory purity. There is no other reason 
for it. Its biggest beneficiaries won't even ask for it. At an MSNBC 
technology summit in February, Jeff Bezos of Amazon, Meg 
Whitman of eBay and Jerry Yang of Yahoo, among other e-
commerce heavyweights, all told Tom Brokaw they're prepared to 
pay sales taxes like everyone else, though some clung to the five-
year moratorium fiction.  

Not every pander is so pure. But most proposals for the government 
to help the Internet enjoy the same self-contradiction: The Internet is 
the most powerful social force to come along for a millennium or so, 
and yet it is so weak and feverish that Dr. Pol is needed to write a 
few prescriptions and hope the patient will pull through.  

Rhetorically, Armey's eContract is all about getting the government 
out of the way. But at least half of his Ten Dotcommandments 
actually are forms of government activism. That alone doesn't make 
them unwise. Of all 10, some are wise, some are not, and some are 
carefully worded to be meaningless. (Dick Armey is against 
"excessive regulations." You?) Together, these political promises 
demonstrate the foolishness, if not the dishonesty, of the cheap anti-
government rhetoric that accompanies them.  

"Preventing frivolous lawsuits" means having the federal 
government crush the traditional freedom of states to make and 
administer their own tort laws. "Protecting intellectual property 
rights" means taking away people's freedom to make and sell 
copies of software or music or ebooks if someone else happens to 
own the rights. Sensible limits (and national standards) on lawsuits 
is a good idea, and copyright protection is essential. But both 
involve the exercise of federal power to limit individual freedom.  

Not clear what's involved in "modernizing our education system" 
(another traditional state matter) or "expanding digital opportunities" 
or "promoting workplace flexibility" or "promoting basic research." 
No doubt nothing as straightforward as federal spending or 
regulation. I smell a lot of tax credits. But a tax credit skews private 
incentives and loses the Treasury money just like direct spending. 
And "promoting" something may be different from requiring it, but it 
is still government interference that is supposed to improve the 
purely private-sector result.  

But these are all quibbles. Speaking, if I may, for all cyberworkers 
and cyberbosses, we could always use another tax credit or three, 
even though we hate government and politicians as much as the 
next guys (biotech). Internet to Congress: Pander away.  

Copyright 2000 The Washington Post Company





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