[Politech] More on 602p's return, politicians taxing the Internet

From: Declan McCullagh (declan@private)
Date: Tue Nov 04 2003 - 04:47:37 PST

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    From: "Dave McClure" <dmcclure@private>
    To: "'Declan McCullagh'" <declan@private>
    Subject: RE: [Politech] Bill 602P lives? Politician warns states may tax 
    emailmessages
    Date: Mon, 3 Nov 2003 15:59:37 -0500
    
    FYI, the Congresswoman might start by talking to her own Sen. Alexander, who
    is leading the effort in the Senate to cripple or kill the Internet Tax
    Nondiscrimination Act. . .
    
    Dave McClure
    
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    From: Johnfortworth@private
    Message-ID: <114.2af3b582.2cd875ca@private>
    Date: Mon, 3 Nov 2003 22:23:54 EST
    Subject: Re: [Politech] Headline of the day: Online sales "rob" state of taxes
    To: declan@private
    
    I got the following e-mail concerning online sales taxes. What a bunch of 
    cry babies!Tobacco sales are bad according to the government with their 
    assault on tobacco. The crap these people do not tell is the federal 
    exercise tax on those products and the illegal sales tax on a federal 
    exercise tax. When you go to the store, the store does not deduct the 
    federal tax before charging a sales tax. They can all go to hell the greedy 
    bastards! I am tired of taxes and the waste that is spent including such 
    was in Vietnam.
    
    Sincerely,
    John C. Brunger, M.S., Ed.
    Fort Worth, Texas
    Republic of Vietnam, Combat, Disabled, Veteran
    
    You said, http://www.dmregister.com/business/stories/c4789010/22630343.html
    
    Online sales rob state of taxes
    Iowa Values Fund success hinges on proposed legislation
    By DONNELLE ELLER
    Assistant Business Editor
    10/30/2003
    Rich Bartlett figures he's lost 5 percent of his tobacco sales to
    Businesses that sell cigarettes online or through catalogs.
    
    "What it means in state tax dollars is probably millions," once all Iowa
    tobacco sales are figured in, said Bartlett, owner of South Side Tobacco at
    2432 S.W. Ninth St.
    
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    Date: Mon, 3 Nov 2003 17:20:24 -0600
    From: Rick Bradley <rick@private>
    To: Declan McCullagh <declan@private>
    Cc: politech@private, marsha@private, powelsonr@private
    Subject: Re: [Politech] Bill 602P lives? Politician warns states may tax email
    
    * Declan McCullagh (declan@private) [031103 09:45]:
     > WASHINGTON - U.S. Rep. Marsha Blackburn, R-Tenn., warned Thursday that
     > governments might start taxing every e-mail transmission if Congress does
     > not quickly renew a federal ban on Internet-access taxes expiring Saturday.
     >
     > [...]
     >
     > Blackburn's warning came in a written statement sent to newspapers for
     > publication as an op-ed piece, and she reiterated it in a subsequent
     > interview.
     >
     > Blackburn said she was concerned that if Congress does not renew the ban on
     > Internet access taxes, local areas could tax an e-mail each time it passed
     > from one computer server to another. She urged the Senate to quickly pass
     > the House-passed ban on Internet access taxes.
     >
     > "We can chuckle about (an e-mail tax) now, but we won't be laughing if
     > America's thousands of taxing jurisdictions actually start taxing e-mail,"
     > Blackburn said. "And that is exactly what could happen if we do not extend
     > this moratorium by Friday night."
    
    As background, certain of the state-level and Federal politicians from
    Tennessee have been grousing over the past couple of months that banning
    Internet access taxes is equal to grand theft from the Tennessee
    coffers.  Frankly, as a voter who uses the Internet I've been chagrined
    that both my states of residence over the past half-decade (Tennessee
    and Texas) are in the minority who tax our online service bills.  While
    giving lip service to the promise of "closing the Internet gap" and
    "bringing Tennessee into the 21st Century" our reps. are busy stifling
    accessibility through access taxes and raising threats of usage taxes
    such as this email taxing nonsense.
    
    There were a lot of constituents (myself included) heard breathing sighs
    of relief when the proposal to ban Internet access taxes was floated.
    Reading the papers here in Nashville one gets the impression that voters
    are supposed to get behind the politicians' push to keep Internet access
    taxes in place, perhaps as some sort of defense of states' rights from
    the encroaching Federalists.  While I can somewhat appreciate that
    particular sentiment, gunning for continuation of a tax that many of the
    interested voters find onerous is hardly a way to keep constituents on
    one's side.  This in addition to long-term mismanagement of TennCare,
    TDOT, and the Sundquist income-tax fiasco, makes it hard to believe that
    our Senators have suddenly gotten religion about fiscal responsibility
    and our really gunning for our best interests this time around.
    
    While Tennessee is rarely held up as exemplary in its fiscal policy, our
    new governor and his staff appear to be making great strides at
    dislodging the graft and economic abuses of the administration(s) past.
    Seeing our Senators (Lamar, you listening?) and Reps. striding out
    guns-a-blazin' to fight for extra charges on dialups and DSL bills fails
    to instill nostalgia for the too-recently departed Sundquist-era, though
    it does inspire recollection.
    
    That said, I'm behind what I understand as Rep. Blackburn's stance that
    we should put an end to Internet access taxes.  She goes into detail on
    the matter, and raises the spector of email taxes in her Oct. 30th
    "Blackburn Report". [0]  The problem I have with this is that inventing
    an email tax proposal out of wholecloth (or so it would appear) is
    basically fearmongering, and it's likely to backfire.
    
    A tax on email transmission, though arguably a /conceivable/ outgrowth
    of state regulation of Internet services, has an immense set of
    practical problems, not the least of which is figuring out a reasonable
    way to compute a tax bill.  Here are some points policy makers would be
    forced to consider:
    
         - Has the ISP lobby been consulted on the burden this will place on
           common carriers to track email count information and associate it
           with taxpayer ids?
    
         - I can telnet to port 25 on a large number of systems around the
           Internet.  It's trivial to type in the SMTP commands to create an
           email over telnet.  How does that affect a proposed billing
           scheme?
    
         - What if I just send all my email through an open relay in China?
           Keep in mind the "telnet hole" just mentioned.  Now what -- do I
           go to jail?
    
         - Does an email sent by a non-profit look different from one sent by
           a for-profit corporation?  What are the ramifications if they are
           indistinguishable (hint: they are)?
    
         - Remember that it's trivial to run sendmail or exim on a home
           system.  Am I to turn myself in as a tax-evader for sending an
           email from my office to my laptop without submitting a 1099?
    
         - When I send mail to myself through an ISP will I be taxed for that?
    
         - Will I be billed for the mail I receive (imagine what that will do
           to the spam problem!)?
    
         - What about when a spammer joe-jobs me and uses my return address
           on 2 million outbound p3n1s emails?
    
         - At my office the bulk of emails sent and received are from
           automated processes related to security and systems maintenance.
           Taxing emails therefore provides us with a strong disincentive to
           maintaining reliable infrastructure.  Will the government be
           willing to compensate our customers for the real costs in downtime
           associated with our degraded networks?
    
         - Under a tax-per-email model it will probably be cheaper for us to
           queue up a bunch of emails to the same destination and send them
           as one big email.  If we do that would that be considered tax
           evasion?
    
         - Does this mean we'll all need emailer/taxpayer id's?  Anyone want
           to think about the privacy considerations there?
    
    There are plenty more heinous ramifications of such a brainstorm.  I'm
    generally disinclined to use the phrase "blatant stupidity", but I'm
    short on euphemisms to otherwise describe an email-tax proposal.  That
    says to me that noone is likely to float such a plan with a straight
    face -- hence, it's probably just a ham-fisted rhetorical tactic by Rep.
    Blackburn.  Only time will tell, but from the ground I'm calling this
    threat a non-starter and probably a silly waste of valuable political
    capital as well.
    
    [0] 
    http://www.tiptongop.org/html/displayweeklyreview.php?shareddocument=8&number=66
    
    Rick
    -- 
      http://www.rickbradley.com    MUPRN: 557
                            |  up with the promise
        random email haiku  |  we would have the CC portion
                            |  working properly.
    
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