Conclusion

The economic case for keeping the Internet tax-free is compelling. To begin with, states do not need the money. State governments are awash in tax revenues, with a total surplus this year in the neighborhood of $36 billion. Michigan is cutting taxes while it enjoys a huge budget surplus, a "Rainy Day Fund" in excess of $1.2 billion, a bulging School Aid Fund, and record per-pupil spending in the public schools.

A healthy economy fueled by Internet technology is an important factor in the current boom that is filling government coffers. The Internet represents a new world of enterprise, increasingly easy for both buyers and sellers to access. Rather than looking for ways to take a chunk of it, politicians should view the Internet as what it is: a means to a more promising future for everyone.