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PartI: “Evaluating the Costs and Benefits of Taxing Internet Commerce,” written by Austin Goolsbee, attempts to simplify the ever so controversial issue of Internet Taxation. ... Internet taxation will continually grow as an issue since internet commerce, almost completely untaxed, is annually growing at an unprecedented rate. ...
PartII: Goolsbee has declared the topic of taxes and electronic commerce to be “the hottest topic in multistate taxation. ...
In 1998, Congress passed the Internet Tax Freedom Act (ITFA). This placed a three year moratorium on new internet taxes. ... Instead, it primarily prevents states from applying new taxes to internet access. ... In this sense, the internet is a virtually tax-free sales channel,”
The debate over internet taxation is very sketchy as both sides lack clear, solid evidence to support their beliefs. On one side, the National Governors Association and state governments argue for internet taxing on behalf of the annual revenue loss due to untaxed internet commerce. On the other hand, free-internet advocates argue that the internet is young and fragile and should be given time to mature before being exploited with government taxes. ... Goolsbee believes that the top four, prioritized, issues to consider include revenue loss from Internet commerce, Internet competition with retail stores, distributional considerations, and enforcement costs. ... ” As Goolsbee quite clearly states, “The most important presumed cost of not enforcing taxes on Internet commerce is the potential revenue loss.” Revenue lost from Internet commerce grows annually as the online marketplace expands and attracts continuously larger pools of consumers, and, thus, larger profit yields. ... ” Bases on the rapid growth rate of online commerce, it only seems logical to question when the government “will” implement Internet taxes with regards to Internet security versus “if” the government should ever place taxes internet goods and services beyond what current regulations consent to.
Second of all, online competition with retail services is a vital element to consider when rationing the debate over Internet taxation.
Approximate Word count = 1543
Approximate Pages = 6.2
(250 words per page double spaced)
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