The Book of Ron Paul
1998 Ron Paul Chapter 66

Internet Tax Freedom Act

26 June 1998

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Tuesday, June 23, 1998

1998 Ron Paul 66:1
Mr. PAUL. Mr. Speaker, I rise today to express skepticism regarding H.R. 4105, The Internet Tax Freedom Act. The stated goal of H.R. 4105 certainly is noble: “A bill to establish a national policy against State and local interference with interstate commerce on the Internet, to exercise congressional jurisdiction over interstate commerce by establishing a moratorium on the imposition of exactions that would interfere with the free flow of commerce via the Internet, to establish a national policy against federal and state regulation of Internet access and online services, and for other purposes.” The bill’s name, “Tax Freedom,” also expresses a laudable notion. One must always be wary of misnomers in Washington — the Justice Department comes to mind as one quick example. The late economic historian, Murray N. Rothbard, Ph.D., so warned when he stated “when someone in government mentions the word ‘fairness’, grab your wallet and run for the hills.” I am, nevertheless, always suspicious when a recently-crafted bill comes to the House floor not only having bypassed the Committee process but without any advance warning. Such was the case with this bill. Moreover, this bill comes to the floor under suspension of the rules which does not allow for amendments and which limits the debate time to twenty minutes on each side. I, in fact, was denied an opportunity to speak by those managing the limited time allowable under this process.

1998 Ron Paul 66:2
However laudable the stated goal of tax freedom this bill still encroaches on state’s right to raise revenue and reserves instead (establishes) an exclusive right for national and international governments to instead impose the “proper” form of taxation and distribute it to local governments as these larger governmental bodies ultimately see fit. At the same time, this particular bill rewards those states which were quick to tax their citizens by “grandfathering” their taxes while excluding other States’ rights to do so certainly making this a bill that lacks uniformity.

1998 Ron Paul 66:3
If the intended purpose of the legislation was simply to keep the internet tax free, a three paragraph bill would have been adequate to accomplish this. Instead, H.R. 4105 is significantly more complex. It, in fact, creates a new 30-member federal commission tasked with, among other things:

1998 Ron Paul 66:4
Examining model State legislation relating to taxation of transactions using the Internet and Internet access, including uniform terminology, definitions of the transactions, services, and other activities that may be subject to State and local taxation, procedural structures and mechanisms applicable to such taxation, and a mechanism for the resolution of disputes between States regarding matters involving multiple taxation;

1998 Ron Paul 66:5
Examining a simplified system for administration and collection of sales and use tax for remote commerce, that incorporates all manner of making consumer payments, that would provide for a single statewide sales or use tax rate (which rate may be zero), and would establish a method of distributing to political subdivisions within each State their proportionate share of such taxes, including an examination of collection of sales or use tax by small volume remote sellers only in the State of origin;

1998 Ron Paul 66:6
Examining ways to simplify the interstate administration of sales and use tax on remote commerce, including a review of the need for a single or uniform tax registration, single or uniform tax returns, simplified remittance requirements, and simplified administrative procedures; and

1998 Ron Paul 66:7
Examining the need for an independent third party collection system that would utilize the Internet to further simplify sales and use tax administration and collection;
These H.R. 4105-established “duties” suggest that the Commission’s real purpose is to design a well-engineered system of taxation (efficient tyranny) rather than keep citizens in a state of “Tax Freedom” as the bill’s name suggests. I encourage my colleagues in this House as well as citizens of this country to be wary of federal and international encroachment upon the privacy and efficiency currently available to individuals around the globe via the internet.

1998 Ron Paul Chapter 66
The text of this chapter was inserted into the section of Congressional Record entitled “Extensions of Remarks” and was not spoken on the House floor.

1998 Ron Paul 66:3
on state’s right probably should be on states’ right or perhaps on the state’s right.

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