Tax Policy And Proposals For State And Local Taxes

The expansion of Internet commerce has presented policy makers with a set of complex new issues over the last few years, from encryption to broadband access; yet, taxation is the most troublesome issue among all. On one hand, free-market libertarians argue that online retail transactions should stay beyond the reach of the Tax Man. On the other hand, state and local officials view the Internet as a tide that will wear away local and regional tax bases with devastating consequences as more and more sales move from the brick-and-mortar retailers on "Main Street" to the atmosphere of Cyberspace. Some Policy makers have adhere to three key principles (Fairness, Simplicity, Limited Scope) as they craft a system for taxation of remote sales over the Internet; others believe that by allowing state and local governments to tax across borders is fundamentally unjust.

The following questions have been addressed in this article:

What are the problems with proposals to apply "efficient" or "uniform" taxes to remote sales?
What are the "Fairness" Arguments with reference to a permanent ban on Internet access and sales taxes?

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