Gov. David Paterson wants tolls on the information superhighway
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A better approach is origin-based taxation. Companies only collect and pay sales taxes where they have a physical presence. Not only is it more fair, it is more feasible. Companies pay one sales tax, not anywhere from 50 to 11,000.
Origin-based taxation also allows for tax competition, which incentivizes states to rein in their worst impulses. If a state charges excessive rates, companies can leave for another state with more reasonable rates.
Internet retailing is one of the few sectors of the economy still growing during this recession. If destination-based taxation prevails, it will cost precious jobs. Consumers will end up paying more for the same goods; their hard-earned dollars won’t go as far as they would under origin-based taxation.
Governor Paterson’s Internet taxation proposal is unfair unworkable, and bad for consumers and businesses alike. Courts should throw it out.
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