Return of the web tax. Be very afraid.

posted at 8:31 am on May 10, 2014 by Jazz Shaw

It’s nice to have someone looking out for you, even if you didn’t know that you had a guardian angel on your shoulder. For the majority of you, since you’re using some form of internet access to read this, you’ve been protected for the last fifteen years by the Internet Tax Freedom Act. It prevents most state and local governments from taxing your internet access fees. But unless Congress figures out something in the near future, that could all be coming to an end on November 1st.

Millions of Americans could be threatened with new state taxes on their Internet access this fall, as Congress struggles with how to extend an expiring moratorium on such levies.

The 15-year-old Internet Tax Freedom Act prevents most states and local governments from taxing access. The moratorium enjoys widespread bipartisan support in Congress.

Broad support, eh? So what’s the problem?

The tax reprieve, however, is set to expire on Nov. 1, and so far, lawmakers have taken few concrete steps to re-enact it as they debate whether to combine it with a separate, more controversial bill. That measure would allow states to collect sales tax from out-of-state online merchants.

Proponents hope that combining the two bills will increase pressure on Congress to negotiate a compromise on the long-delayed online sales-tax legislation.

“I think enough interested parties would insist that if we’re going to pass that [Internet-access tax moratorium], this other component might be attached to it,” said Rep. Jason Chaffetz (R., Utah), who is leading a House effort to reach a compromise on the sales-tax bill. He added: “To think the first would move unattached is fantasy land at this point.”

As so often happens in the complicated world of political thinking, I’m confused. How is a bipartisan move to extend a tax moratorium “fantasy land” unless it’s attached to … a tax? Who comprises this large contingent of people pushing to tax internet access… the Amish?

We’ve had more than a few lengthy discussions here about the MFA. And while I understand the issues being raised by brick and mortar sellers on this score, many readers here have provided ample arguments which raise serious concerns about doing it. But the debate currently taking place seems to have little to do with the bone we’ve been chewing these past few years. Reading through the quotes in this article, not only from Chaffetz, but from Dick Durbin and others, it’s difficult to see how this is an argument which makes the case of the MFA stronger. Instead, it seems like a case of taking a widely popular program – the current exemption – and lashing it to the MFA without offering anything balancing in return.

Nice tax exemption you’ve got there. Be a shame to see anything happen to it.

To me, it seems as if these are two unrelated proposals which each deserve a vote and should stand or fall on their own merits. Tying them together takes on the air of political skullduggery. And a renewal of the Internet Tax Freedom Act would pass on its own fairly easily, particularly in an election year. In fact, there’s already a bill waiting in the wings to do just that, and do so permanently. It’s been waiting for action since last year.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Because Congress exists to spend money to buy votes. The only two ways to get that money are to print it or seize it. What’s so complicated about that?

bofh on May 10, 2014 at 8:45 AM

and… Bishop.

bofh on May 10, 2014 at 8:45 AM

People voted to have everything and because of that we’ll have nothing.
Accept it and live with less.

vityas on May 10, 2014 at 8:52 AM

State tax, inevitable. National tax, in the wings. Destruction of internet sales, the ‘unintended’ consequence. Big winners? Congressmen paid off by the Chamber and box stores. The beat goes on, and ‘vityas’ – insightful.

vnvet on May 10, 2014 at 9:03 AM

The real issue underlying all this talk is spending–not taxing.
Starve the co-ruling political class from taxing and buying votes and power that they alone may benefit.

Don L on May 10, 2014 at 9:10 AM

All these new tax ideas will help them confiscate private / personal property indirectly and INCREMENTALLY…..like Progressives always do.

Mileage tax proposed in Cali would…….force people out of their cars and into more urban areas, where they are more dependent on government services…..which…..grow UNION power from hiring more transit workers, police, fire, etc for Metro areas.

Web tax would…..force out small businesses trying to get started that might be a threat to the big giants like Amazon or such. So if Mom and Pop can’t start their business where people shop then they can’t compete, can’t earn a living and……become dependent on…..the government.

Taxes on what next? Garage sales? Lemonade stands for 7 year olds?

And on and on and on.

PappyD61 on May 10, 2014 at 9:14 AM

Why do tax exemption’s expire but taxes never do?

Mpcruden on May 10, 2014 at 9:15 AM

and the best part…….we have no political party to stand against this pile of excrement.

…..and people don’t care enough to stop it.

So onward to tyranny we march.

PappyD61 on May 10, 2014 at 9:16 AM

s.o.b.’s

petefrt on May 10, 2014 at 9:18 AM

Governor Stay Puft will be backing this to the hilt to ensure NJ maintains it’s ‘highest taxes in the nation’ status.

SickofLibs on May 10, 2014 at 9:19 AM

Why do tax exemption’s expire but taxes never do?

Mpcruden on May 10, 2014 at 9:15 AM

I am sure that “Libby Free Ordie”, who I see here often, can answer that. People like that love taxes – on everyone else. But otherwise, your point is well taken.

And people like Libby like to use taxes to, er, “motivate” people. Technically that means oppression. If I am not mistaken, “progressive” means “oppressor” in French. Or Swahili. Or somethin’.

The tax code is Congresses true source of power. When you have an exemption, you exempt their power. They are power hounds – like Libby.

Chuck Ef on May 10, 2014 at 9:32 AM

The ideal thing would be to have a flat tax or a national sales tax (which taxes the ability of one to buy $300 Air Jordans) in place of the federal income tax.

By doing this we could eliminate the loopholes, the breaks for special interests and the IRS, which has become the American Gestapo.

bw222 on May 10, 2014 at 9:55 AM

we have no political party to stand against this pile of excrement.

PappyD61 on May 10, 2014 at 9:16 AM

In America, we have only the Party of Big Government, with two wings, the communists (D) and the Democrats (R).

LilyBart on May 10, 2014 at 10:24 AM

Congress is just a pile of idiots….. unbelievable stupidity, ignorance and above all arrogance.

ultracon on May 10, 2014 at 10:34 AM

Congress is just a pile of idiots….. unbelievable stupidity, ignorance and above all arrogance.

ultracon on May 10, 2014 at 10:34 AM

Pile of something. The word “Idiots” doesn’t come immediately to my mind ….

Chuck Ef on May 10, 2014 at 10:53 AM

In America, we have only the Party of Big Government, with two wings, the communists (D) and the Democrats (R).

LilyBart on May 10, 2014 at 10:24 AM

^^^^
THIS

workingclass artist on May 10, 2014 at 10:56 AM

The Internet is currently our best example of the free market at work. Since the government has not been able to capture the Internet under its thumb, the Net illustrates how well the market really functions when the government stays out of the way.

But have no fear. Control freak politicians never rest, and a few of the more dedicated ones are working relentlessly to slap chains on the world’s most unfettered market.

roflmmfao

donabernathy on May 10, 2014 at 11:01 AM

s.o.b.’s

petefrt on May 10, 2014 at 9:18 AM

S.O.B.’s
…there! ^
.
.
.

In America, we have only the Party of Big Government, with two wings, the communists (D) and the Democrats (R).

LilyBart on May 10, 2014 at 10:24 AM

^^^^
THIS

workingclass artist on May 10, 2014 at 10:56 AM

….and there! ^

KOOLAID2 on May 10, 2014 at 11:28 AM

http://washingtonexaminer.com/fec-chair-warns-conservative-media-drudge-hannity-face-regulation-like-pacs/article/2548163

This seems to me to be the “winning” comment for the day. The absolute truth at any rate. And terribly sad. Comrade! Vlad the Obama Impaler!

Chuck Ef on May 10, 2014 at 11:39 AM

Another awful policy brought to you, in part, by the Republican establishment. Handing them the Senate will just be adding votes to democrat policies.

fight like a girl on May 10, 2014 at 11:39 AM

Not this ^

In America, we have only the Party of Big Government, with two wings, the communists (D) and the Democrats (R).

LilyBart on May 10, 2014 at 10:24 AM

Actually I meant this ^, but whatever.

Chuck Ef on May 10, 2014 at 11:40 AM

Rush has been saying for a while that there is no opposition party. Not yet, anyway.

fight like a girl on May 10, 2014 at 11:41 AM

Simple, Jazz. The bipartisan Party-In-Government’s “support” for the access tax moratorium is nothing more than lip service. They’d love for their state counterparts (and eventually, themselves) to tax both Internet access and sales over the Internet, but they’ll take what they can get until they get the rest.

Since they can’t get the Internet sales tax right now, and they have the end of the access tax moratorium handy, they’ll tie the extension of the access tax moratorium and the allowance of the sales tax together to torpedo the extension.

Then, after the mid-term elections, they’ll slap on the sales tax.

Steve Eggleston on May 10, 2014 at 11:43 AM

Another awful policy brought to you, in part, by the Republican establishment. Handing them the Senate will just be adding votes to democrat policies.

fight like a girl on May 10, 2014 at 11:39 AM

Point of order – they’re already providing the votes. What a RepubicRAT “majority” in the Senate would add to the mix is the veneer of “bipartisanship” to DemocRAT policies.

Steve Eggleston on May 10, 2014 at 11:47 AM

Who comprises this large contingent of people pushing to tax internet access… the Amish?

No; it’s state governments (who see the dollar signs) and cell phone providers (whose network access and usage fees are fully taxed).

Steve Eggleston on May 10, 2014 at 11:58 AM

and the best part…….we have no political party to stand against this pile of excrement.

…..and people don’t care enough to stop it.

So onward to tyranny we march.

PappyD61

Rand Paul: This tax moratorium makes black people mad, so we have to stop pushing it.

/sarc

xblade on May 10, 2014 at 12:00 PM

Much has been said recently about the alleged waning influence of the Tea Party. The establishment wing of the GOP, self-labeling as “the adults in the room”, has had a great time preening, posing and flexing about how they’ve “fought back” against “malign influences” within the party and are now steering it on the correct course.

I do believe that the influence of the Tea Party is waning, but I don’t think it’s because its reputation has been tarnished by a dishonest media and 2 political parties who want it to be so…although that doesn’t help. The real reason that the Tea Party’s influence within DC has been reduced is because of people like Jason Chaffetz. While I’m not well-enough versed in his sympathies to say that he ran strictly as a Tea Party candidate, I do recall that he was seen as something of a “new breed” of Republican…fiscally responsible, in favor of reducing federal spending and not raising taxes. He, along with Paul Ryan and many of the 2010 Freshmen were seen as allies of the Tea Party, who would represent the interests of the Tea Party voters.

However, once ensconced in the Beltway Culture, these same people who were ostensibly there to fight the tax-and-spend policies of the left and the Crony “Capitalism” of the rent-seeking corporate welfare types, were co-opted by these forces and essentially became establishment against the interests of those who got them to where they are in the first place. Now Chaffetz has become one of them. He begged out of challenging that fossil parasite Orrin Hatch, tags along as Flimsy Graham’s Gladys Kravitz toady on trying to ban online gambling and now turns gutless in the face of the tax grabbers, suggesting we need to allow another pound of our flesh to be extracted to prevent the collection of a new tax.

The Tea Party’s influence in DC is waning simply because those who sympathize with the objectives of the Tea Party have propped up these people on the promise that they will stop the rot, only to see them become the enemy establishment they were elected to fight. What’s the point of spending one’s own time, money and energy electing people who say they will fight the expansion of the Leviathan when all we end up with is Kelly Ayotte?

fitzfong on May 10, 2014 at 12:06 PM

Because Congress exists to spend money to buy votes. The only two ways to get that money are to print it or seize it. What’s so complicated about that?

bofh on May 10, 2014 at 8:45 AM

It is slightly more complicated. A permanent bill would deny them the opportunity to vote to extend it every few years (and the good press they get from doing that).

Fenris on May 10, 2014 at 12:20 PM

Only in a Democrat world is the failure to asses a tax that never existed an ‘exemption’.

pat on May 10, 2014 at 1:03 PM

Go ahead and allow internet sales tax on the condition that the taxing state carry the cost of collecting the tax. It is only fair. Vendors in states without a sales tax will forced to cover an expense they have no say in creating and no benefit collecting. States are free to create reciprocity agreements to cancel out the costs of their respective retailers.

For example, California can require an Oregon retailer to collect sales tax, less costs. Of course costs could be greater than collection in which case California owes the retailer the difference. CA would be liable for the fixed cost of setting up and maintaining the system and the transaction costs, including any transaction fees. Oh, and by the way, it is an all or nothing proposition. CA can not cherry pick the large Oregon retailers, but must cover ALL businesses with sales in CA.

deadman on May 10, 2014 at 1:08 PM

Nice tax exemption you’ve got there. Be a shame to see anything happen to it.

“Legitimate redistribution” — the Pope

Schadenfreude on May 10, 2014 at 1:15 PM

Why do tax exemption’s expire but taxes never do?

Mpcruden on May 10, 2014 at 9:15 AM

Well, that’s not necessarily true. Why, I remember when our town passed a temporary extra sales tax of 3% on ‘entertainment’ items to build a convention center. They promised us it was only for three years.

Granted, we’re still paying it at the moment, but it’s only been, what, 18 years now?

Wait….

There Goes the Neighborhood on May 10, 2014 at 1:31 PM

Socialism requires a large amount of money and they are running out. That’s why they are trying to find other means such as land grabs. Do whatever it takes to shut off their income. We do that to tyrants in other countries why not here. Protect your money because they will be looking for reasons to seize your bank account.

crankyoldlady on May 10, 2014 at 2:39 PM

If you like your Exemption, you can keep your Exemption. Period.

Kenosha Kid on May 10, 2014 at 2:42 PM

I actually come down on the side of letting this one expire. Why? Because this should be left up to the states. The federal government has no business being involved.

Now, that’s different from sales tax on purchases made over the Internet. If I am in Ohio, and I make a purchase from a company in Louisiana, which they then ship to me, that is clearly interstate commerce, and the federal government has the limited power to regulate it.

But here, we’re not talking about that. Instead, we’re talking about the fees you pay for your Internet service to your Internet Service Provider. So if I’m in New York, and I’m buying my Internet service from Time Warner, who also has offices and facilities in New York that they are using to provide that access to me, right now Congress is telling the State of New York that they can’t tax that transaction. Which is absurd. States always have the right to tax transactions that occur within their states.

In this case, the outcome happens to be one we like — less taxes — but it’s still a matter of federal overreach. The federal government has no business telling state and local governments what taxes they can and cannot impose on transactions occurring within their jurisdictions.

Shump on May 10, 2014 at 3:38 PM

a flat tax or a national sales tax

bw222 on May 10, 2014 at 9:55 AM

Years ago, Milton Friedman explained why this will never happen.

Every day, when you go to work, you provide or produce something in exchange for revenue. The only thing Congress can produce is favorable tax legislation in exchange for revenue, so as long as Congress is for sale to the highest bidder we’ll never have tax reform. The Republic will collapse under the weight of the regulations first.

oldleprechaun on May 10, 2014 at 4:27 PM

People voted to have everything and because of that we’ll have nothing.
Accept it and live with less.

vityas on May 10, 2014 at 8:52 AM

Very true. But I’m beginning to think that even Mother Teresa would become corrupt in Washington. I think we’ve plain run out of options to “fix” Washington, no matter who we vote in.

But, it’s not just Washington…it goes down to the various state governors mansions, the state legislatures, and on down to counties and cities/towns. I’ll go further…many of our neighbors are corrupt scammers who will sell you or me out in a heartbeat.

Dr. ZhivBlago on May 10, 2014 at 4:49 PM

The progressives want your money, so the only solution is to collapse the progressives and/or the internet in it’s entirety until they do see the light. If they think they can weather that storm they are very sadly mistaken.

How many people out there access and purchase from a tablet or iphone thingy these days, now shut that off completely and watch the political worms squirm.

But for the love of god will you people STOP sending money to progressives? (R or D, a progressive is a progressive. They are scum and pig shjt, stop feeding them.)

Diluculo on May 10, 2014 at 6:39 PM

I lived before the net and I’ll live after it, you tax it and I just eliminate it from my house, no problem.

mixplix on May 10, 2014 at 7:51 PM

Clearly the tax that taxes the tax needs to be taxed.
Bcs there’s not enough taxes.

Badger40 on May 11, 2014 at 12:00 AM

Take MORE money and flush it down the drain.

V7_Sport on May 11, 2014 at 1:34 PM

So if I’m not being taxed, what’s all that stuff I pay for at the end of the high speed internet bill?

NoPain on May 11, 2014 at 10:35 PM

how about the govt cut back on its spending, they tax us enough already.
here is a short version of govt spending.
U.S. Tax Revenue : $2,170,000,000,000
Federal Budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt $14,271,000,000,000
Recent Budget Cuts: $38,500,000,000
Let’s now remove 8 zeros and pretend
It’s a household budget:
Annual Family income : . . . $28,700
Money the family spent : . . . $38,200
New Debt on the credit card : . . . $16,500
Outstanding Balance on the credit card $142,710
Total budget cuts so far . . . . .$38.50
Got it ????? . . . OK now
Here is another way to look at the debt Ceiling.
Lets say, You come home from work and find
There has been a sewer backup in your neighborhood . .
And you rhome has sewage all the way up to your ceilings
What do you think you should do? . . . .
Raise the ceiling, or remove the $hit?

sniffles1999 on May 12, 2014 at 10:49 AM