Tax Reform

Congress has voted to permanently bar state and local governments from taxing access to the Internet. For 17 years, the ban on Internet taxes has benefited millions of Americans by empowering them to conduct transactions on the Internet free from the fear of additional tax burdens. "This is a tremendous victory for America's Internet economy, and for all of us who participate in this economy", said Institute for Policy Innovation president Tom Giovanetti.

Passage of PITFA as part of HR-644 now "intensifies" S-698 opponents' push to "stave off the attempt" to pass that bill, said IPI president Tom Giovanetti in a statement. S-698 "has never had committee scrutiny on the Senate side and [has] never been subject to amendment on the floor." Senate Republican leaders "must commit to first submitting this legislation to the same procedures, hearings and scrutiny appropriate to any and all legislation, especially since this proposal has serious Constitutional questions," Giovanetti said.

Fans of the just-passed permanent Internet Tax Fairness Act (PITFA), which bans taxes on Internet servcie, were weighing in Thursday (Feb. 11), including warning about the Internet sale tax legislation whose future consideration was a tradeoff for that passage.

The Institute for Policy Innovation (IPI) commends the U.S. Senate for passing the Permanent Internet Tax Freedom Act (PITFA). "This is a tremendous victory for America’s Internet economy, and for all of us who participate in this economy," said IPI president Tom Giovanetti. 

For years, big-government pro-taxers have often deployed parliamentary tricks to thwart the vote on a permanent Internet tax fix. This time, however, there may be nowhere to hide.

Tom Giovanetti, president of the freedom-oriented IPI, recently wrote “Now that Texas Republican Kevin Brady chairs the Ways & Means Committee, he will have more to say about the details of any eventual tax reform than will the future president. So what really matters is Brady’s priorities…and they are encouraging”.

Most of the major presidential candidates have released tax reform plans with enough specifics to run them through an economic model. On tax policy, Republicans tend to focus on economic growth, while Democrats tend to focus on distributional effects.

Bartlett Cleland of the Institute for Policy Innovation writes: The VAT is attractive to those who…[w]ant to grow government… Whether or not those proposing such taxes are interested in expanding the scope of government is almost irrelevant, because once the tools for such expansion are in place they can be used by future politicians to grow government subtly.  Similarly, whether a tax is labeled as a VAT or not is also irrelevant if the function is the same—for example by not allowing companies to deduct wages.

The corporate tax is actually a hidden tax on employees, shareholders and consumers. When we raise taxes on corporations, they simply pass the tax along in the form of lower wages, lower dividends, and higher prices.

Since 1998, the federal government has prohibited states and localities from imposing such taxes. This has helped Americans from all backgrounds gain access to the Internet. The economic and educational benefits of this policy are vast and immeasurable. It is long past time for Congress to make permanent the ban on Internet access taxes.