No Taxing the Internet

Should sales over the Internet be taxed? A congressional advisory panel recently said no. But that doesn't mean Congress can't ignore the panel and do what governors and mayors across the country—including Governor Engler—are urging them to do: Apply sales taxes to the Internet.

Engler recently testified before Congress that it is "unfair" to subject sales of traditional businesses to taxation while exempting sales conducted over the Internet. He endorses a National Governors' Association plan that would apply sales taxes to Internet purchases, and create a "third-party entity" to collect and distribute those taxes.

Imagine the chaos if more than 80,000 units of government adopted sales taxes and applied them to Internet sales outside their jurisdictions. The real reason state and local governments want to tax the Internet is because they can't bear to sit idly and watch a huge cash cow pass them by.

But state and local governments are awash in budget surpluses. And a big part of America's current economic boom is due to the explosion of economic freedom set off by the Internet. Let's not kill the goose that's laying the golden eggs. Let's leave the Internet free from taxes.