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Tech at Night: Dick Durbin’s Internet Tax, FCC Reform

By: Neil Stevens (Diary)  |  April 18th, 2011 at 11:00 PM  | 

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Tech at Night

In a startling turn of events, I’m starting tonight’s edition of Tech at Night at 6pm, roughly 8 hours earlier than I have been starting it lately. Imagine that.

Top story is a shocker. I mean, I had no idea the Democrats would get this far out there. Dick Durbin, Democrat of Illinois, wants to pass a national sales tax solely on Internet transactions. The sole purpose of this bill is to raise prices on all Americans who buy things online. This is basic stuff, folks. Every Republican needs to oppose this concept. Every single one. I will be taking names of the deadbeats who join with the Democrats on this, and I will be pushing for sanctions at the ballot box.

Meanwhile, The FCC is in need of major reform. Need to know why? Let’s start with this Harvard Business review look at the FCC. It’s not the most accessibly-written article, but it explains how the FCC is basically rigging its competition analyses to prevent itself from having to demonstrate that the wireless market is competitive. Direct evidence of competitive prices abounds, even in markets with less competition. I like this conclusion:

If regulators are opposed to consolidation as a means of addressing the spectrum crunch, the remedy is not to deny a licensee the right to sell or trade their spectrum as they see fit, but rather to get on the stick and get more spectrum out there faster. As in now.

House Republicans are on the case, too.

The special interest broadcast television stations may not like it, but we have more effective, innovative uses for spectrum than showing infomercials. Bob Latta wants to encourage the FCC to “get more spectrum out there faster” as HBR said. The bill’s purpose is to get TV broadcasters to give up spectrum, sell it off again to wireless Internet providers, and use some of the proceeds to pay for public safety communications. It’s win-win.

The FCC needs fundamental reform though. Darrell Issa says regulation is hindering innovation already, putting the US at risk of falling behind the rest of the world. We lose jobs and competitive advantage when we can’t innovate as well.

And National Review Online is on the case of rolling back the FCC, calling on the Congress to intervene and use provisions of the Telecommunications Act to reduce regulation. Randolph J. May points out that the FCC “is required to repeal or modify any regulation it determines to be no longer in the public interest.” And cleverly, he suggests that we can even strengthen that requirement by changing the burden of proof, making it so that proponents of any given regulation must demonstrate that the regulation is still needed. The default position should be to deregulate.

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  • dontell

    I am so proud Durbin is my Senator….thank you Chicago!~

  • http://hughcpeconjrs.blogspot.com/ hughpecon

    Wow! Sometimes these progressives can even surprise me. Its taken them a long time to reach this point but I see now they can move very quick when it comes to violating the constitution. The sad thing is that the American public has become so ignorant that they mostly don’t even notice. Sometimes just don’t seem to care. The FCC has zero constitutional authority to be doing this. Dick Durbin should be removed from office at the next election. We need to start giving all potential congressman a constitution test be fore they can be elected to office.

  • jackhammer

    I see the lack of sales tax on internet bought goods as an unfair competitive advantage. I have no choice but to collect sales tax for the goods that I sell, and thankfully I sell clothes, which are nto as easily or readily bought on the internet as branded hard goods and books and such.

    But I do see it as an unfair advantage for internet retailers to entice shoppers with “sales tax free” prices, while I and everyone else who pays rent in a brick and mortar store, carries more inventory, and pays sales people has to charge it.

    I would be more in favour of the concept of the sales tax of the state where the goods are sent from is charged….that could at least lead to sales tax arbitrage to attract amazon and co, which would be good for many retailers….then new hampshire, oregon and whatever other states have 0% sales tax woudl see a run in infrastructure, and the others would have to look to drop to get a piece of the pie.

  • http://www.hakubi.us/ Neil Stevens

    But, my position is this:

    Read my lips. No new taxes.

    And I mean it.

  • jackhammer

    Neil,

    If we have a corporate tax rate of 35% and GE uses the loopholes to end up paying Zero on their billions in profits…then I would absolutely support a tax system that might introduce a new replacement tax, that would be new, but applied more fairly.

    Not socialist fairly, but fairly in the “no fancy schmancy lawyer accountants finding loopholes for the over $10 million crowd while all the normal schlubs are paying 40% taxes”….

    So while I would also oppose all new forms of taxation, I do see the lack of internet sales tax as akin to smuggling cigarettes across the border….

    and didn’t the Tyco guy go to jail for among other things taking his NY state bought art to New Hampshire to save the sales tax,a nd then bring it back to hang in his Manhattan appartment?

    And why no comment until now on the internet poker stuff?

  • http://www.hakubi.us/ Neil Stevens

    No, you are talking about socialist fairly, when you’re insisting Fairness or Social Justice or whatever depends on imposing new or higher taxes because you can ‘t compete anymore.

    Guess what? In a free market, the winners thrive, and the losers rightfully go out of business. Don’t like it? Again, repeal your state’s sales tax. Don’t raise my taxes to subsidize your inability to compete in the market place.

    Your greed should not cost me money.

  • http://www.hakubi.us/ Neil Stevens

    It came up in the comments of my last Tech post.

    Basically this is what you get when you elect Democrats.

  • jackhammer

    than anyone selling clothes over the internet.

    I just object to the government using me as a collector of up to 11% sales tax (depending on which state the store is in)…while a giant operation like amazon actively avoids it.

    I woudl say the lack of internet tax is more analogous to the “government option” idea that was floated for healthcare, and how then private profit motivated companies could not compete.

    My occupancy and staffing costs are below what an Amazon or so would charge, and I push a lot of volume, so I don’t see them as a viable competitor to me….

    and there is capitalist fairness too….it is the fairness that results in people not being able to co-opt laws or curry favour in the form of crony capitalism.

  • http://www.hakubi.us/ Neil Stevens

    We have a federal system.

    Your talk of “the government” suggests a distinct ignorance of the fact that we have *two* governments in most jurisdictions: one is national and one is sat the state level.

    And guess what? If you don’t like your state’s taxation, then you fix that. Not my problem.