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Capitol Comment

    Tech Fact #3 - Consumers to Politicians: No Internet Tax

    09/23/1999

    As President Clinton vetoes Congress’s tax cut – thereby rejecting American values of hard work, thrift and marriage – other politicians in Congress and the state houses would increase taxes, despite record budget surpluses at the federal and state levels.

    Why tax the Internet? Well, that’s where the money is these days, right? Politicians see the large numbers associated with E-commerce and get greedy. They claim they are "losing" tremendous amounts of money because sales taxes do not apply to most Internet transactions. However, this claim is based on rhetoric, not facts.1

    Fortunately, the clouds of hot air emanating from Washington and the state capitols do not fool consumers. They see this push for an Internet sales tax for what it is – a money grab to expand the size of government. A poll recently conducted by @plan, a Web marketing research firm, found that 73 percent of U.S. Web users were opposed to a national sales tax on consumer products sold over the Internet, whereas only14 percent were in favor.2 The same poll found that 58 percent of Internet users believe that taxing online transactions would hurt the growth of E-commerce.

    The most reassuring numbers though, were the 36 percent of Internet-using, registered voters who say this issue will impact their choice in next year’s presidential election. Furthermore, these opinions were common to all political affiliations – with 67% of Democrats, 80% of Republicans, and 72% non-affiliated voters expressing opposition to a national Internet sales tax. Hopefully politicians will stop talking long enough to listen and realize that American consumers want to keep cyberspace a tax-free zone.

    1Lilly, Aaron, "No Internet Tax: Why Internet Sales Taxes Aren’t Necessary," Capitol Comment No. 252, Citizens for a Sound Economy Foundation, September 16, 1999. (http://www.cse.org/cse/cc252-csef-telecom.htm). Also see "The Sky is Not Falling: "Lost" Sales Taxes and the Internet," TECH Fact 2, Citizens for a Sound Economy Foundation. (http://www.cse.org/cse/com-csef-tech080399.htm).

    2@plan Internet Poll â„¢ released September 14, 1999.