• Tag Archives internet
  • The GOP’s Proposed Internet Tax Would Crush Small Business

     

    The Wall Street Journal editorial board was entirely correct yesterday when they said, “Republicans have spent the last year cutting taxes and regulations, which hasn’t been easy. But now some Members of Congress want to blunt their handiwork by passing an online sales tax. Yes, they actually believe this would be good policy and politics.”

    Despite the talk of possibly attaching it to must-pass funding legislation and the rhetoric about the bill itself, consumers will experience the Remote Transactions Parity Act (RTPA) as a sales tax increase. If the bill becomes law, more of their purchases will be subject to sales taxes and the downward pressure on sales taxes among states will be reduced, so rates and bases in all the states are likely to go up in the longer term.

    Removing the Incentive to Keep Taxes Low

    Right now, sales taxes are only assessed on purchases when the seller has a physical presence—like a warehouse, store, or office—in the buyer’s state. This is because the seller is the legal taxpayer, so the status quo is a “no taxation without representation” situation, not a special loophole set up for Internet retailers, as is sometimes claimed.

    The RTPA seeks to get rid of that physical presence limit on state taxing powers. It would let states reach outside their geographical borders and compel another state’s business to calculate, collect, and remit to that first state. The cost of that tax will usually be passed along to the customer and will feel like a tax increase to consumers.

    Additionally, the long-term effect is that this arrangement will lessen the downward pressure on taxes between jurisdictions. Think of it like this: it’s the difference between driving your car across the D.C. border to Virginia to fill up with lower Virginia gas taxes—that’s how it works now and that’s what keeps at least some downward pressure on D.C. tax rates. If D.C. made the rate high enough, everyone would exit and fill up in Virginia.

    But if the approach in the RTPA is applied to this thought experiment, it would mean that when you pull into that Virginia gas station, they look at your D.C. plates and charge you the D.C. gas tax rate. There’s no exit. Consumers will wear their home jurisdiction like a tax albatross when they shop online.

    The RTPA is the opposite of tax competition; it’s a makeshift tax cartel among the states.

    Killing Competition with Compliance Costs

    There is also a heavy regulatory compliance burden. Under the RTPA, businesses will be left calculating for thousands of distinct sales tax jurisdictions, each with their own bases, rates, exemptions, and tax holidays. These distinct jurisdictions and their rules will hurt small, independent sellers and those who use platforms like Etsy and eBay. RTPA advocates point to free government-provided tax-calculating software as a way to ameliorate these compliance burdens. But there are serious concerns with the performance of that software and there are no allowances made in the bill for costs associated with testing or integrating these systems.

    These small businesses and independent sellers would also be subject to audits from up to 46 states (the current number of states that impose a sales tax) and could be hauled into the auditing state’s court. The costs associated with that are potentially lethal for a one-person shop selling on eBay or Etsy.

    In an environment like that, many small firms would fold and some would be pushed onto bigger platforms, like Amazon, that will handle the tax issues for them—for a fee, of course. This ability to comply with onerous tax law, along with Amazon’s new business model of fast delivery—which requires warehouses that trigger sales taxes—explains Amazon’s support for RTPA.

    In summary, the RTPA is a small-business killer—which is why big box retailers support it. It crushes small competitors with compliance costs. State politicians are for it because they’d rather tax sellers in other states who can’t vote them out of office.

    Consumers will be left with less money in their pockets and fewer choices online.

    Reprinted from the Competitive Enterprise Institute.


    Jessica Melugin

    Jessica Melugin is associate director of the Center for Technology & Innovation at the Competitive Enterprise Institute. Her research focuses on technology issues including electronic commerce, Internet taxation, net neutrality regulation, and antitrust.

    This article was originally published on FEE.org. Read the original article.



  • We Won’t Stop Terror by Sacrificing Internet Privacy

    We Won’t Stop Terror by Sacrificing Internet Privacy

    Government’s main and possibly only purpose should be the protection of its citizens. We delegate this responsibility to our governments so that we can better use our time to enjoy leisure activities and civilized pursuits not associated with law enforcement and security protection. When a government no longer provides that security and stability for its citizens, they rarely exist much past that point.

    Benjamin Franklin once said, “Those who would give up essential liberty, to purchase a little temporary safety, deserve neither liberty nor safety.” Many interpretations of this quote exist in relation to the current state of radical Islamic terrorism plaguing many countries throughout the world. How much of our freedom do we relinquish to secure our cities and our way of life?

    Massive Online Monitoring



    Benjamin Wittes, a senior fellow at the Brookings Institution and the editor of Lawfare, was interviewed a few years ago by Robert Siegel of NPR, stating that Franklin’s quote was misunderstood in the context of a changing landscape of threats and the digital revolution. He states,

    It is a quotation that defends the authority of a legislature to govern in the interests of collective security. It means, in context, not quite the opposite of what it’s almost always quoted as saying but much closer to the opposite than to the thing that people think it means.”

    Considering the most recent terror attack in London, which left 7 people dead and 50+ people injured thus far, English Prime Minister Theresa May has called for a massive uptick in online monitoring of social media accounts, among other measures, to monitor communication channels in hopes of locating and preventing terror attacks.

    “We cannot allow this ideology the safe space it needs to breed – yet that is precisely what the internet, and the big companies that provide internet-based services provide,” Ms. May said. But what does that mean?

    Charles Arthur at The Guardian and Andrew Griffin at The Independent make a case for the exact opposite intent occurring from drastic measures that Ms. May is proposing.

    “If successful, Theresa May could push these vile networks into even darker corners of the web, where they will be even harder to observe,” wrote Jim Killock, the executive director of the Open Rights Group, “But we should not be distracted: the Internet and companies like Facebook are not a cause of this hatred and violence, but tools that can be abused. While governments and companies should take sensible measures to stop abuse, attempts to control the Internet are not the simple solution that Theresa May is claiming.”

    This is precisely the point.

    The Internet Is Just a Tool

    The internet is not some animate being that aids or promotes terrorism. Facebook and Twitter don’t wake up in the morning and, over tea, decide to aid radical Islamic terror. Would we blame an ax for the crime committed with it and ban all axes from society? The logging industry just might have something to say about that. Likewise, with any tool, it is sheer foolishness to think that the regulation of its use will lead to reduced crime if we do not deal with the true root and cause of the crimes themselves.

    But this is not surprising from governments today that have a basic disregard for human freedoms. Out of control regulation and legislation in almost every area of life is commonplace. In fact, a case could be made that any area of life not regulated in some way by government presents a threat to the foundations of their existence.

    What relevancy would a nation-state have in your life if they removed regulation and allowed you to make free choices as you saw fit, rather than from a limited number of choices they have already pre-approved?

    Impacts from Ms. May’s action could be numerous with unintended consequences becoming manifold overnight. Would it not make more sense to allow more freedoms on the internet so that radical ideologies could be exposed, challenged and potentially marginalized or their believers’ ideas changed? More control of public discourse is a step on the road towards tyranny, not more freedom.

    Franklin may not have envisioned the internet existing, but his Pennsylvania Gazette was instrumental in overthrowing an oppressive regime that was enforcing its ideology on the colonies. British and American tradition is one of a metered response and the openness of discourse. Ms. May’s actions exhibit neither.

    So What Do We Do?

    The question becomes then, how do we combat terror. Is there a solution? Many have been batted around by western governments. U.S. President Donald Trump wants to effectively reduce travel from hotspot terror countries. Ms. May wants to regulate the internet. Angela Merkel believes that an openness of travel and a presentation of the superiority of western ideals will win the day.

    The solution to the problem of Islamic extremism will potentially be much more complicated than those, but not one that we should have to sacrifice our freedoms for, both to those who would take it away by committing acts of terror and to those who purport to know best how to keep us safe.

    In 1776, regular colonial citizens recognized that there was an ideological difference between British and Colonial rule. They took up arms to defend themselves because their governments at the time would not or could not keep them safe any longer. The same is happening in Western Europe and will most likely begin to happen in the U.S. soon. How long will it be before ordinary citizens will take up arms to prevent terror when their governments see only the removal of privacy, rights and freedoms as the solutions to a crisis?

    Friedrich Hayek in his book, The Road to Serfdom, writes extensively on the necessity of individual rights and government’s interest in removing those rights. He writes,

    It is true that the virtues which are less esteemed and practiced now  –  independence, self-reliance, and the willingness to bear risks, the readiness to back one’s own conviction against a majority, and the willingness to voluntary cooperation with one’s neighbors  –  are essentially those on which the of an individualist society rests. Collectivism has nothing to put in their place, and in so far as it already has destroyed then it has left a void filled by nothing but the demand for obedience and the compulsion of the individual to what is collectively decided to be good.”

    Much can be said about how western powers have aided the rise of radical extremism through interventionist and botched interventionist policies in the Middle East and elsewhere. Should we also pay the price for their mistakes in the confiscation of our rights to privacy and liberty? The people of Europe will have to make that hard choice.

    In the coming weeks, months and years we will also need to make hard choices about how to combat terror. What is true for now is that our governments cannot protect us sufficiently from radical Islamic terror and the problem seems to be worsening.

    One item I do agree with Ms. May on is that enough is enough. It’s about time we named our enemy and found ways to curb his ability to contribute to the destruction of our way of life. No one should have to live in fear of gangs of ideologically motivated men killing using vehicles, knives or bombs. These are marks of chaos and anarchy, not stability and freedom. Perhaps if we addressed the real cause of the problem we could take one step back towards a prosperous and open society.

    Reprinted from Politics Means Politics.


    John Bianchi

    John Bianchi is a marketing professional and the Chapter Leader for America’s Future Foundation in Raleigh. You can keep up to date with his articles on Medium here: https://medium.com/@johnmbianchi21.

    This article was originally published on FEE.org. Read the original article.


  • Donald Trump wants to close up the Internet

    Hours after Donald Trump suggested the U.S. ban Muslims from entering the United States, the leading Republican presidential candidate said America should also consider “closing the Internet up in some way” to fight Islamic State terrorists in cyberspace.

    Trump mocked anyone who would object that his plan might violate the freedom of speech, saying “these are foolish people, we have a lot of foolish people.”

    “We have to go see Bill Gates,” Trump said, to better understand the Internet and then possibly “close it up.”

    Trump characterized the problem of Internet extremism by saying, “We’re losing a lot of people because of the Internet.”

    The Internet has taken center stage in both the 2016 presidential race and the Obama administration’s current fight against ISIS. Democratic candidate Hillary Clinton urged tech companies to “deny online space” to terrorists. Clinton then anticipated and waved away presumed First Amendment criticisms.

    “We’re going to hear all the usual complaints,” she said on Monday, “you know, freedom of speech, et cetera. But if we truly are in a war against terrorism and we are truly looking for ways to shut off their funding, shut off the flow of foreign fighters, then we’ve got to shut off their means of communicating. It’s more complicated with some of what they do on encrypted apps, and I’m well aware of that, and that requires even more thinking about how to do it.”

    The Obama administration spoke about cyberspace in a Sunday night speech from the Oval Office. The president said he would “urge high-tech and law enforcement leaders to make it harder to use technology to escape from justice.”

    While less explicit and extreme a statement than Trump’s, many observers took Obama’s statement to be about outlawing strong encryption.

    Source: Donald Trump wants to close up the Internet