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Gateway to High-Tech Heaven?
by Robert S. Boynton
The Industry Standard, August 7, 2000 (ceased publication, August 2001)
Utah's Gov. Mike Leavitt began to understand the problem ...
when he ordered groceries while he and his family were on vacation in
California.
"I used Netgrocer.com and when we got home two days later the boxes were on
our front porch. Then I thought about the transaction: I ordered in California,
the Web site is in New York, the box was shipped out of New Jersey and it was
consumed in Utah. One transaction, four states – all of which could make a
reasonable claim that it occurred within its jurisdiction. Now that really
alarmed me because one day we might have multiple and discriminatory taxes.
"But I realized the problem was much worse when I looked at the individual
pieces of the transaction. A bottle of peanuts, for instance, is taxed in five
states if they are raw. If they are roasted, they're taxed in 11 states, and if
they are honey-roasted they're taxed in 21 states. Now take 7,000 tax
jurisdictions, multiply that by the number of different products and multiply
that by the number of different definitions of taxable products!
"I predict the system will eventually fail by virtue of its sheer
incoherence," Leavitt says.
What's the problem underneath the problem? What needs to change for the problem to get solved?
Our tax system is based transactions taking place with buyer, product (atoms), and seller all in the same jurisdiction.
Our governments get much (a third?) of their operating budgets through sales taxes.
What happens to Gov. Leavitt's analysis when you add foreign jurisdictions? Europe's VAT (value-added tax) on everything?
The problem | How are governments going to replace lost sales tax revenue unless we tax online transactions?
Basic vocabulary
tax
jurisdiction
What is not a debatable issue?
How much of gov't revenue comes from sales taxes? Property? Income? Other taxes?
Does the system rely on voluntary collection?
Map out the current landscape of this problem.
organizations
laws and regulations
personalities
conferences
web sites
software technologies
Any issue as broad as taxation is made up of sub-issues and underlying issues and larger issues.
Help us untangle this complex situation by clearly stating the prominent taxation issues in debatable terms.
Excerpt, summarize, and link to the partisan advocacy positions on taxation taken by the players.
Senate
Approves Internet Tax Ban Extension
by Robyn Weisman
NewsFactor.com, November 16, 2001
On Thursday, the U.S. Senate passed HR 1552, the Internet
Nondiscrimination Act (INDA), extending the ban on new Internet taxes for
another two years. The original ban expired on October 21st.
The U.S. House of Representatives already had passed matching legislation last
month. President Bush, who has expressed support for the bill, will sign it into
law, according to White House sources. ...
Although the sales tax provision was not passed, the issue will by no means
disappear .... When the states return in two years, ideally with a
simplification of the sales tax structure and with the technology needed to
relieve the burden of collecting and remitting sales tax, they are likely to
face a more sympathetic Congress.
How is taxation affected by the driving and restraining forces of the Internet?
small,
fast, cheap
visual: multimedia
networked: big pipes
embedded: almost invisible
universal: everyone has
them; international
ubiquitous: always on,
everywhere
intelligent
easy to use
trusted
standardized
current laws
provocative question with Bistro link
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