Internet Taxation Is on the Way; Just the Latest Obama Administration Power Grab

The Washington Times (Washington, DC), April 2, 2010 | Go to article overview

Internet Taxation Is on the Way; Just the Latest Obama Administration Power Grab


Byline: Timothy H. Lee , SPECIAL TO THE WASHINGTON TIMES

The Obama Era has become a protracted, nightmarish Whack-A-Mole game of tax increases and bureaucratic self-enlargement. In sector after sector of American life, another scheme to expand government and wrench more earnings from Americans' pockets pops up.

Its next targeted sector? The Internet.

Take a look at the following introduction of a nationwide tax upon Internet goods and services, inserted within page 58 of the Federal Communications Commission's (FCC) National Broadband Plan released this week:

Digital Goods and Services Taxation

RECOMMENDATION 4.20: The federal government should investigate establishing a national framework for digital goods and services taxation.

The National Broadband Plan is focused on increasing beneficial use of the Internet, including e-commerce and new innovative business models. The current patchwork of state and local laws and regulations relating to taxation of digital goods and services (such as ringtones, digital music, etc.) may hinder new investment and business models. Entrepreneurs and small businesses in particular may lack the resources to understand and comply with the various tax regimes.

Recognizing that state and local governments pursue varying approaches to raising tax revenues, a national framework for digital goods and services taxation would reduce uncertainty and remove one barrier to online entrepreneurship and investment.

Ponder that curious logic for a moment.

Americans already suffering from a recession prolonged by Mr. Obama's policies are being asked to concur that raising - yes, raising - taxes on a nationwide basis will somehow reduce uncertainty and remove one barrier to online entrepreneurship and investment.

Consider also that section's observation that entrepreneurs and small businesses in particular may lack the resources to understand and comply with the various tax regimes. As if federal tax laws are straightforward? Anyone who has asked two separate tax attorneys to ascertain a provision from the Internal Revenue Code and received seven different indecipherable answers can immediately recognize the absurdity of suggesting that federalizing Internet taxes would somehow reduce uncertainty and facilitate understanding and compliance.

In just fourteen months, political discourse during Mr. Obama's tenure has pioneered new depths in Orwellian Newspeak - think of jobs saved or created, for instance - but this is remarkable even by those standards. …

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