For Immediate Release: November 16, 1999

Prohibit Online Taxes and Remove Barriers to Net Access

San Francisco, CA - Utah Governor Michael Leavitt’s Internet taxation plan, "Streamlined Sales Tax System for the 21^st Century," released today on behalf of the National Governors Association (NGA), would increase costs for consumers, slow economic growth, and create barriers to Net access, especially for the poor, according to Sonia Arrison, director of the Pacific Research Institute’s Center for Freedom and Technology.

Governor Leavitt claims his plan is designed to protect Main Street businesses, but Leavitt relies on economic myths. As Arrison asserts: "The problem with the argument put forth by local government lobbyists is that it relies on the myth of the zero-sum game - the idea that growth in one sector is fueled by a loss of growth in another. In fact, as tax-free Internet shopping has grown, so have traditional retail sales taxes collected by local governments over the last five years."

Pacific Research Institute, a member of the e-Freedom coalition, proposes:

• Permanently banning Internet access taxes;
• Making permanent the moratorium on discriminatory sales and use taxes
• Repealing the federal 3% excise tax on telecommunications;
• Prohibiting the discriminatory taxation of interstate telecommunications; and,
• Preventing the installation of "internet tolls" - new taxes and fees levied on telecommunications providers and their customers when cable is installed along highways and roads;

If the aforementioned proposals are embraced, Internet access costs would decrease significantly, making the technology readily available to all Americans.

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For more information contact Laura Dykes by telephone at 415/989-0833 x113, by fax at 415/989-2411, or by e-mail at ldykes@pacificresearch.org.

The Pacific Research Institute for Public Policy is a non-profit organization dedicated to the promotion of the principles of individual freedom and personal responsibility. The Institute believes these principles are best encouraged through policies that emphasize a free economy, private initiative, and limited government. By focusing on public policy issues such as health care, welfare, education, and the environment, the Institute strives to foster a better understanding of the principles of a free society among leaders in government, academia, the media, and the business community.