According to Congressional Digest, electronic commerce has enjoyed unfair advantage for many years by not having to acquire some taxes. The government is mainly responsible for this one-sided playing field toward online sellers. Many authorities believe that the Internet is essential to high productivity and economic growth and that preservation of the Internet potential is important. Indeed, president Bill Clinton signed the Internet Tax Freedom Act law in 1998 to prohibit any Internet access taxing – extended by succeeding presidents ever since. Based on the current tax laws, online store merchants collect sales tax from in state consumers as similarly as “brick and mortar” stores charge sales tax when customers come into their stores.
Online stores have enjoyed a tax free advantage over flesh and blood shops. Because the internet did not start out being taxed, it was the perfect opportunity for cheap shopping. People everywhere have always been attracted to a good deal. However, it would not be long before businessmen would be attracted to this kind of money, as well as politicians finding a way to tax the money. With a potential new taxable income, politicians are doing everything possible to pass the necessary laws to make online retailers charge sales tax.
Supports of the tax free Internet say that because of the way transactions are carried out on the web, electronic sales are vulnerabl... ... middle of paper ... ...o adopt a unified sales tax for Internet purchases. They are a liberal group for Internet taxation, which recently got shot down with the onset of the extended Internet Tax Freedom Act. The coalition is not currently trying to persuade e-tailers to join their position on Internet taxation. Big names such as Amazon.com have not joined the talks for good reason. Online retailers do not want states to adopt a plan to implement taxes online since it would threaten the tax-free shopping advantage that these online retailers enjoy.
An estimated $23 billion was forgone because of the lack of reporting. Reporting these taxes is not the only problem (Yang 22). Another issue arises between the online retailers and brick-and-mortar business owners who believe the tax-free purchases hurt their business. The problems created by this issue, if fixed and enforced, could help fix many financial problems for state and local businesses. What is Congress doing to alter the problem?
The current feeling behind internet taxation is pretty mixed between the people, businesses and the states. For instance the states are pushing for more aggressive taxation for e-commerce transactions to hopefully help bring some business back to the states during this economic downturn. On the other hand businesses are more worried about how transactions will be taxed ... ... middle of paper ... ...e some of these articles were written and there is readily available free or low-cost software for companies that calculate tax rates for businesses that take part in e-commerce transactions. Seeing as how many retailers participating in e-commerce transactions don’t have a physical presence or nexus it makes sense to tax the buyer of the product by the tax rate where the item is purchased. If a residence based tax system was put in place that means the tax rate would reflect where the businesses headquarters are, and this would prove to be inefficient because many businesses would relocate to tax-free zones to avoid the taxes.
These software products include, but are not limited to, the Microsoft Office Suite and Internet Explorer browser. One of the leading questions is if this is a “good” state of affairs: should one company so dominate computing and the Internet when we rely so heavily upon it? The most recent lawsuit involves the Justice Department and 20 state attorneys general. They believe that Microsoft has used its monopoly in operating system software to protect its dominance and eliminate competitors. The government says that in the long run, consumers will be harmed, because there will be less competition and fewer choices.
Internet Taxation “Should We Tax the Internet?” was written in response to the recent findings of the Advisory Commission on Electronic Commerce in the May 2000 issue of The American Spectator. The argument is between the liberals and conservatives on the issue of whether or not to tax Internet purchases. The liberals believe that Internet purchases should be taxed so that state and local tax bases are not eroded because of increasing Internet purchases. On the other end the conservatives believe that Internet purchases should be kept tax-free, since tracking sales are completed and several states are involved with each purchase. George Gilder the author of “Should We Tax the Internet?” is extremely conservative in his views and is against all taxes.
These are taxes enforced on individuals or corporations for use internet access. Currently, there are 10 states which charge for internet access. These taxes are sometimes undetected by the customer because the tax is already embedded in the information or data processing services fee or the telecommunication services fee that is already being paid. So it is likely that firms or individuals don’t even realize they are paying this internet tax. If the internet tax is not already imbedded in these fees it would mean that the firm or individual would have to pay additional fees to access the internet.
In addition to t... ... middle of paper ... .... Also, no marriage tax would help eliminate the double taxation of individuals under the current system. The three major sides currently heading controversy over tax reform: the flat-rate income tax, the national sales tax, and the idea that government should focus on reform in other areas are complicated and very difficult to assess. It is easy to see however that the flat rate income tax would not accomplish its goal of increasing savings and simplifying the tax code, and that those who say that tax reform is not necessary are in error. The tax system has many flaws and does not help to further the economy. It certainly has not helped to bridge the gap between rich and poor, even in this time of economic boom.
Also, if the U.N. were to take charge, the cost to deliver their services globally would be far too costly for website like google. Since many Countries have their own agendas and policies implemented, there is no need for the U.N. to regulate the Internet. Since Internet monitoring is a controversial issue on a political and societal scale, it has both negatives and positives that benefit both the government and people. Although some may oppose Internet monitoring, it is necessary in some circumstances. It can help prevent and detect cybercrime, unauthorized access to sensitive data, and terrorism.