Media Advisory: Heartland Institute Experts React to Durbin Bill to Tax Internet Sales

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A Democratic congressional aide told CNET News Tuesday that U.S. Sen. Dick Durbin (D-IL) will introduce a bill after the Easter recess allowing states and localities to collect sales taxes on the purchase of goods and services over the Internet. The following statements from tax and technology experts at the Chicago-based Heartland Institute may be used for attribution. For additional comments, please contact the individuals directly.

To tax businesses that impose little or no cost on a state or locality is unfair and, I believe, immoral.

-- Steve Stanek, Research Fellow for Budget and Tax Policy, The Heartland Institute

A Democratic congressional aide told CNET News Tuesday that U.S. Sen. Dick Durbin (D-IL) will introduce a bill after the Easter recess allowing states and localities to collect sales taxes on the purchase of goods and services over the Internet.

The following statements from tax and technology experts at the Chicago-based Heartland Institute may be used for attribution. For additional comments, please contact the individuals directly.

“It’s curious how Democrats such as Dick Durbin argue for higher taxes on cigarettes and other items they don’t like with the idea that higher taxes will discourage people from using those items. Following Durbin’s own logic, an Internet tax would result in less Internet shopping activity – which would hurt any retailer that uses the Internet, and result in less tax revenue than projected.

“It’s also curious how so many liberal politicians have gone years slamming huge retailers such as Wal-Mart and are now doing the bidding of Wal-Mart and other huge retailers by imposing taxes on their Internet competitors.

“Taxes should be collected to pay for services. Out-of-state retailers don’t require police or fire protection, don’t use sewer or water services, don’t cause roads to be clogged by workers and shoppers. To tax businesses that impose little or no cost on a state or locality is unfair and, I believe, immoral.”

Steve Stanek
Managing Editor, Budget & Tax News
Research Fellow for Budget and Tax Policy
The Heartland Institute
815/385-5602
sstanek(at)heartland(dot)org

“This noxious idea is not likely to get very far, especially since the new Republican House is loathe to consider such a tax increase. Sen. Durbin’s burning desire to sock it to Internet retailers – most of them small business folks – still can’t trump the U.S. Constitution or the Supreme Court.

“The court ruled in the 1992 Quill v. North Dakota case that the Commerce Clause of the U.S. Constitution forbids states from requiring companies to collect sales taxes unless the company has ‘nexus’ in the state – a physical presence, such as a store or warehouse. This is perfectly sensible policy, even in the digital age.

“Online retailers pay their taxes at their locations, in the gasoline they put into their trucks, and in the corporate levies imposed by state, local, and federal governments. Imposing yet another tax on Web-based retail will only slow down the digital economy – one of the few parts of our economy still breathing.”

Jim Lakely
Co-Director, Center on the Digital Economy
The Heartland Institute
312/377-4000
jlakely(at)heartland(dot)org

“The Orwellian name Sen. Durbin gave his proposal – The Main Street Fairness Act – conjures a world of horse-drawn buggies, parasols, and penny candy. This wholesome scenario of days gone by couldn’t be further from the truth, however.

“Rather than leveling the playing field between bricks-and-mortar shops on one hand and Internet and mail-order retailers on the other, Durbin’s plan instead will raise costs for consumers who will continue to appreciate the convenience of shopping from home. Driving the increase in costs will be the additional overhead placed on these businesses with no recognizable benefit for bricks-and-mortars – who should find ways to raise their level of competitiveness instead of asking the government for favors.”

Bruce Edward Walker
Managing Editor, InfoTech & Telecom News
The Heartland Institute
bwalker(at)heartland(dot)org
989/430-5557

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Heartland Institute
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