Katie McAuliffe

Financial Services Appropriations Bill Reins in Obama Government Agencies

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Posted by Alexander Hendrie, Justin Sykes, Katie McAuliffe on Tuesday, June 21st, 2016, 1:10 PM PERMALINK


Later this week, the U.S. House of Representatives will vote on H.R. 5485, the Financial Services and General Government (FSGG) Appropriations Act, introduced by Congressman Ander Crenshaw (R-Fla.). This legislation allocates 2017 federal funding for numerous agencies including the Treasury Department, the IRS, the Securities and Exchange Commission and the FCC.

H.R. 5485 allocates this funding in a responsible, pro-taxpayer way and reins in out-of-control agencies to ensure they do not overstep their bounds and needlessly waste federal resources. ATR supports this legislation and urges all Members of Congress to vote for it when it reaches the floor.

Restrains IRS Overreach
H.R. 5485 contains several important policy riders to rein in the IRS. Under this administration, the agency has targeted non-profit organizations, families, and small businesses again and again in a concerted effort to limit free speech and harass taxpayers.

The legislation prohibits the IRS from implementing a new regulation on non-profit organizations, from giving bonuses or rehiring former employees without proper tax compliance measures, or from targeting individuals based on first amendment rights. In addition, the package implements extensive reporting on IRS spending to ensure the agency is wisely utilizing taxpayer resources.

Reins in SEC Funding and Improves Transparency
FSGG allocates $1.5 billion for the SEC, lowering the agency’s funding by $50 million from previous levels in fiscal year 2016. The legislation also creates new reporting requirements for the SEC, which would improve the transparency and fairness of the agency. One provision requires the SEC to report to Congress the cost associated with the regulatory burdens promulgated under the Dodd-Frank Act. 

The legislation also ensures First Amendment free speech is protected by prohibiting the agency from requiring the disclosure of political contributions in SEC filings. 

Responsibly Allocates IRS Funding 
The legislation provides $10.9 billion for the IRS, reducing their funding by $236 million compared to fiscal year 2016. In addition, the legislation funds the agency $1.3 billion below President Obama’s budget, which called for more than $1 billion in additional funding for the agency.

FSGG also allocates this funding in an efficient way. Of the $10.9 billion in funding, the legislation allocates $2.1 billion to taxpayer services and provides $290 million for the IRS to improve customer service, fight fraud, and improve cybersecurity.

Given the IRS's record of ineptitude and incompetence, the last thing the agency needs is more money. The agency’s woes are due to its management problems, not because of insufficient resources and this legislation will force the agency to spend its resources in a more responsible way.

Blocks Implementation of Obamacare
FSGG also contains important provisions that restrict the ability of the federal government to implement Obamacare. Specifically, this legislation stops transfer of funds between the Department of Health and Human Services and the IRS to fund Obamacare. Since passage of the law, the Obama Administration has funneled funds across agencies to hide the true costs of the law and pay out special interests at the expense of the American people.

Most importantly, the legislation restricts the use of funds to implement the individual mandate. Under current law, anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS. This year a family in the middle class will be forced to pay 2.5 percent of Adjusted Gross income or $1,390 if they do not have insurance. The Obama administration uses the Orwellian phrase “shared responsibility payment” to describe this tax.  

Increases CFPB Oversight and Accountability 
This legislation provides increased oversight over the Consumer Financial Protection Bureau, by subjecting the agency to annual congressional appropriations process, something that has not occurred since the CFPB was created in 2010. By bringing funding for the CFPB under the congressional appropriations process, this legislation increases the accountability of the CFPB to congress and taxpayers. 

Further, H.R. 5485 temporarily halts the CFPB’s costly and overreaching arbitration rule by requiring the agency to study the use of pre-dispute arbitration before issuing such regulations. The CFPB has not adequately justified the need for rule, and enactment would increase the costs of products and reduce access for the very consumers it would supposedly protect.  

Restrains FCC
The FCC’s snowballing regulatory binge continues to tighten its grasp on basic functions of the Internet and the free market.  The FCC's dubious interpretations of "ambiguous" legal language, even at the protest of Congress, leave no other options but for Congress to restrain and direct FCC spending as Congress is statutorily required to do.

To enhance transparency and public participation, funds must be used for the agency to make all proposed regulations public three weeks before the final legally binding vote.  It constrains some of the agency’s overreaches on policy, by preventing the agency from using any appropriated funding for “Net Neutrality” regulations until court proceedings conclude. 

The dollars in the public pot are limited. While the agency does receive less money for operations than it asked for, and the is an overall decrease in funding of $25 million, the FCC maintains an ample budget of $315 million to aptly pursue its core functions and target waste fraud and abuse within its programs. 

 

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ATR Response to Net Neutrality Ruling

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Posted by Katie McAuliffe on Wednesday, June 15th, 2016, 1:08 PM PERMALINK


The DC Circuit Court’s 2-1 decision in favor of the FCC’s Internet regulations represent a significant blow to the integrity of the Internet. The decision fails to address any meaningful issue and will serve to stifle innovation and investment in the future.

This decision also allows the FCC and the rest of the government to continue to overstep its authority and threaten the sovereignty of the private sector. 

Grover Norquist, the President of Americans for Tax Reform said:

“Treating the internet as a 19th century utility means putting it under political control, driven by backward looking bureaucrats. Such treatment will kill innovation, delay the future and abort thousands of new entrepreneurial efforts. This court decision must not stand.”

The spirit of the FCC’s regulations was to prevent Internet Service Providers (ISPs) from censoring free speech by charging different prices for different content. However, the dissent by Judge Williams makes clear that, while these rules were intended to promote growth, they will, more likely, slow innovation and investment.

The FCC’s regulations not only impose unnecessary burdens on existing ISPs by dictating their private pricing practices, it will undeniably deny smaller ISPs from being able to gain access to a greater share of the market. This will have the counterproductive effect of severely limiting competition.

As Judge Williams addressed in his eloquent dissent, the FCC’s regulations will put Internet on a trend towards incurable monopolies. Despite being created to prevent these sorts of economic conditions, the regulations will actually make them a reality. This is the “ultimate irony” of these rules.

Despite this obvious setback, we will continue to participate in the steps ahead to ensure that the Internet is able to return to a free-market approach that has fueled its thriving success. We also plan on being a voice in the coming discussion on how to ensure the Internet best serves the American people. We are optimistic that the value of the free market will shine through in this fight.

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Greg Elin

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Norquist Statement on Protecting Internet Freedom Act


Posted by Katie McAuliffe on Wednesday, June 8th, 2016, 10:16 AM PERMALINK


The following can be attributed to Grover Norquist, President of Americans for Tax Reform, regarding the United States' oversight role for Internet domain names:

“The power of the Internet should be free, open, and available for all Americans and all the people of the world.  It should not be taxed, over-regulated, policed and/or spied on by Washington bureaucrats or bureaucrats overseas.

“The Cruz-Duffy legislation raises important questions as to how we best protect the Internet which has delivered great progress, and promises more, both politically and economically.” 

This is a response to a proposed plan to transition the oversight of Internet domain names to a global multi-stakeholder community. The loosely designed plan has prompted many fears that authoritarian regimes will influence and undermine the goal of making the Internet more accessible to people around the globe.

Senator Ted Cruz (Texas) and Congressman Sean Duffy (Wis.) introduced companion legislation in both Chambers, entitled the Protecting Internet Freedom Act, which would ensure no such transition can take place without Congressional approval. 

As it currently stands, the US hands off oversight to the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit based in California, which is meant to help facilitate the coming transition. The Commerce Department will review a full plan for the transition this month.

However, many lawmakers on the Hill, like Cruz, and Senators James Lankford (Okla.), Mike Lee (Utah), and Marco Rubio (Fla.) are not satisfied. Cruz has championed this bill as the “last chance to save Internet freedom.”

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Norquist Applauds the Continuing App Evolution

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Posted by Katie McAuliffe on Wednesday, April 20th, 2016, 2:18 PM PERMALINK


Today, Comcast announced the launch of its new ap that can replace the need for a cable box.  The app is currently available on Roku and Samsung Internet TVs, and is available to manufacturers and developers building any number of devices to show content on a television screen.  

The Federal Communications Commission is currently proposing rules that would require cable companies maintain the cable box, even if it could be replaced by an app. 

The following statement can be attributed to Grover Norquist, President of Americans for Tax Reform:

"The FCC is trying to mandate old and outdated technology. Comcast has solved the problem that the FCC has decided to continue."  

Once again free market forces move faster than government.  The Federal Communications Commission is just now proposing rules that would require cable companies maintain the clunky cable box.  

This new development should clear some space on the FCC's calendar.  Now they can go back to working on getting more spectrum to the market for all of our tech devices.  That would be a real net benefit for consumers, and actually within the FCC"s job description.

 

 

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President Obama Agrees to Stop Internet Taxes

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Posted by Katie McAuliffe on Thursday, February 25th, 2016, 4:52 PM PERMALINK


The Internet Tax ban has always been widely supported, but because of its popularity for 18 years it could not escape other ball and chain initiatives.  Now it is Free!

Four major bipartisan trade bills have been signed into law this Congress under the leadership of Senator Hatch (R-Utah).  These bills help American job creators and workers compete in the global market.

There are more reasons than efficient trade enforcement and facilitation in this Act to celebrate.

Senator Hatch, along with allies Senator Ron Wyden, Chairman Kevin Brady, and Chairman Bob Goodlatee, included a permanent ban on Internet access taxes in the Trade legislation.

The Internet Access Tax was a threat that Congress held over the heads of the American people for 18 years.  The ban on these taxes was periodically extended, but without permanency it was always a bargaining chip that tax & spenders wouldn’t take off the table.  That threat is gone.

On Wednesday February 24th, President Obama signed the fourth of this suit of bills into law, the Trade Facilitation and Trade Enforcement Act, with Senator Hatch at his side.

Americans can thank a bipartisan effort in both the Senate and the House to pass trade legislation and the Permanent Internet Tax Freedom Act.

Americans, can also thank President Obama for signing this legislation into law.

Like the permanent extension of the Bush tax cuts, the Permanent Internet Access Tax Ban is a win to celebrate.

In a time when it seems as though the partisan gridlock seems impossible to break, and American taxpayers see there taxes rising, we need to remember these victories.

These victories are not small.  These are battles we never have to fight again.

Photo Credit: 
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New Jersey State Senator Proposes Bill to Infringe on Ability to Buy Pets

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Posted by Katie McAuliffe on Tuesday, February 2nd, 2016, 1:42 PM PERMALINK


Senator Lesniak of the New Jersey State Senate recently introduced NJ SB. 63, which infringes on the right to conduct business via the Internet.  This bill specifically attempts to regulate an already regulated industry, animal breeding.  It is now a common practice to purchase a puppy of a specific breed or cross breeds online from a private breeder. 

The senator uses the rallying cry of animal abuse to shield the true nature of the bill, more intrusion and regulation of the internet on the part of the government.  Animal abuse should be taken seriously.  Americans level of awareness of “puppy mills” or other unsavory breeding methods for any pet has raised dramatically over the decades.  It is my belief that no one in search of that special pet wants their best friend or its relatives to have been abused in any way.

This problem of abuse and added regulation has already been addressed by Animal Plant Health Inspection Service through USDA in 2013.  The rule established that these “unseen sellers” must be federally licensed, thus allowing inspection by federal authorities.  The rule also encourages buyers to report inhumane conditions and sickness stemming from breeding mismanagement.  To put it simply, the New Jersey bill is there only to force regulation down the throats of small business owners while increasing government control. 

The bill, read to the letter, seems to completely ignore the need for service and emotional support dogs, which are often done via the Internet sometimes through unseen sellers.  Many people with mental and physical disorders, ranging from a child with autism to a veteran to PTSD, use service dogs to better their quality of life.  This bill has the potential to hurt those in need by limiting their access to available animals.  

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Julia Ogden

The current laws aren't working so well in my area. Just Pup's motto of "Happy Pups, Healthy Pups, Reputable Breeders" just doesn't coincide with the two that died during his transport or explain the three found in his freezer. Pass S-63!!! http://www.nj.com/bergen/index...

tk88

Anyone who is against this bill either doesn't understand the truth about where these dogs come from, or has a hand in the money the industry makes. I have PERSONALLY been in almost every puppy store in the state of NJ. I've found filthy, matted, adolescent dogs with overgrown nails, I've found puppies so sick their entire bodies shook with ragged breaths as mucus poured out their noses. And in the "nicer" stores called "boutiques" and "puppy superstores" that are bright and pretty and overpriced? I've found dogs bred by people who shoot their dogs in the head when they're done with them, who have their properties littered with the corpses of dogs and have expired medications the administer to the dogs who never see a veterinarian. The fact is that ALL "order to ship" puppies and puppy stores get their dogs from puppy mills and other bad breeders. They are treated with cruelty and poorly bred which creates lifelong health and behavior problems. There are countless stories of people who have gotten puppies from these places and had the dog die shortly after or cost them thousands of dollars in medical fees for the rest of their lives. If these dogs were say, cars or computers the businesses selling them would not be able to stay afloat because people wouldn't buy such a shoddy product. But people feel sorry for the dogs and keep them. I have a dog like this and he's cost over $5000 in less than a year in medical fees! Please, make the govt stay out of people's purchases online and in person of inanimate objects. But when it comes to live animals? Yeah, they need protection, and the consumers need protection from being scammed for a sick animal as well.

Jeanne Clayton

Ms McAuliffe, The problems of abuse and added regulation was NOT EFFECTIVELY addressed by APHIS. The "inspections" by the USDA are a massive failure. There are only about 125 inspectors for the entire country and checking commercial dog breeders is a small part of their work load. If they are lucky they may get to the commercial breeders once a year. Many times the breeders are not at home so the inspectors just leave. Many times they find violations and give a certain date that the violations must be fixed. Just as many times they don't have the time to return to check. Many times they let breeders off the hook for violations that should be reported. The breeders are well aware of this and all the other loopholes they can slip through. The standard of care based on the Animal Welfare Act is so low that a dog the size of a beagle can spend her entire life in a wire cage the size of a dishwasher and be in full compliance with the law.

A rule encouraging buyers to report inhumane conditions and sickness stemming from breeding mismanagement is laughable. The people who own these houses of horrors (many of whom are Amish, live lives on farms far away from the public. No one is permitted on their property to see the inhumane conditions. People don't go there to buy puppies, the puppies are shipped to pet stores in trucks all over the country. Pet store owners don't tell authorities if there is a sick dog, they just send it back or worse. Customers who buy a sick dog are afraid to report this to authorities because the pet shop tells them they will not give them their money back if they do.

The current regulations in NJ, passed in the Pet Protection Act of Jan. 2015 and The NJ Disclosure Law, passed in June 2015, are so ineffective that pet stores just ignore them because In NJ the Consumer Affairs office only has TWO INSPECTORS for the entire state to handle ALL consumer complaints. Complaints filed against pet stores by consumers sit in piles on a desk for 4, 5, 6 months or more. Twenty six pet stores were cited in january 2016 with over 698 violations of the Pet Protection Act and fines issued up to 76,500.00. Several stores were shut down and several owners were arrested and criminally charged. In the last few months 2 "Just Pups" pet stores in East Brunswick and Passaic were closed down by the board of health and put out of business. The owner is currently criminally charged with 132 counts of animal cruelty. There is so much money in selling puppy mill dogs that most of the stores settled with the Attorney General, paid these huge fines, and went back to business as usual. These stores are STILL committing the same violations today.

Ms. McAuliffe, your conclusion that the proposed bill moving through the state senate is only "to force regulation down the throats of small business owners while increasing government control" shows how little you know about this subject. The pet store small business has showed time and again that they are incapable of regulating themselves and unfortunately, need more regulations to protect animals from inhumane treatment and, to protect consumers from their unscrupulous practices driven by one thing...greed.

Your final paragraph is ridiculous. The proposed bill has nothing to do with ignoring or cutting down on dogs to help people with disabilities. Service dogs ARE NOT purchased via the internet from unseen sellers. Service dogs are carefully chosen by trained professionals interacting with them to see if they have the qualities and temperament to be trained as a service dog. Trainers DO NOT source potential candidates from puppy stores or puppy mills.

For someone speaking as an American for Tax Reform, you certainly missed the mark on this topic. You should be criticizing the pet stores in NJ, not the laws being proposed to make them treat animals humanely, and the public fairly. These criminal acts are costing NJ millions of dollars in costs, thousands of man hours, and clogging the court system who prosecute their crimes. Your taxes and mine pay for this.


ATR Letter: Keep ITFFA in Customs Bill

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Posted by Katie McAuliffe on Friday, January 15th, 2016, 2:56 PM PERMALINK


ATR this week released the following letter supporting the inclusion of the Internet Tax Freedom Forever Act (ITFFA) in the Trade Facilitation and Trade Enforcement Act of 2015. The letter can be found here, and is pasted below:

January 12, 2016

Dear Senators,

Making the ban on Internet Access Taxes Permanent is a tremendous victory for all taxpayers.  Thank you for including the Internet Tax Freedom Forever Act (ITFFA) in the Trade Facilitation and Trade Enforcement Act of 2015.

To stop Harry Reid’s war on taxpayers, I urge you to vote for cloture, against point of order, and for the “customs” bill as a whole with ITFFA included.

It does not follow that online sales tax must be tied to ITFA wherever it goes.  The argument that all states need a new revenue offset, does not apply.  Only seven states currently have access taxes.  Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas and Wisconsin are exempt from the current ban.

The Center on Budget and Policy Priorities estimates eliminating these taxes would amount to $561 million in aggregate savings to those taxpayers, Texas makes up $358 million for the $561 total. From the grandfathered states Senate Commerce Committee Chairman John Thune (R-S.D.), Sens. Ted Cruz (R-Texas), Rob Portman (R-Ohio) and Ron Johnson (R-Wis.) are sponsors of the legislation.

In terms of original intent, the Act was not necessarily based on the nascence of the Internet industry. It was based on the fact that the Internet is intrinsically multijurisdictional, thereby uniquely situated for multiple and discriminatory taxation. 

The grandfathered states were intended to phase out their access taxes.  However the grandfathering continued through subsequent reauthorizations giving the seven taxing states more time to phase out their taxes.  States have not phased out the taxes on their own.  There was never an intention to grandfather states in.

ITFFA does not exempt sales made on the Internet from taxation.  Taxes for e-commerce must simply be taxed at the same state and local sales tax rate as non-Internet sales.

If online sales tax were to be considered as part of a package, it is more naturally aligned with Digital Goods Fairness, Mobile Workforce and Business Activity Tax Simplification.  These are all tax nexus bills.

If you should have any questions or thoughts, please contact me, or Katie McAuliffe, Federal Affairs Manager, by phone, 202-785-0266, or by email, kmcauliffe@atr.org.

Onward,

Grover Norquist 
President 
Americans for Tax Reform             

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Excessive Regulation Costs US Economy $2 Trillion Dollars

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Posted by Katie McAuliffe on Tuesday, January 5th, 2016, 4:08 PM PERMALINK


Agencies continually enact new regulations without eliminating unneeded, obsolete and conflicting regulations. These regulations weigh down the US economy with a $2 Trillion price tag.

On Wednesday the House will consider the SCRUB Act, (H.R. 1155, “Searching for and Cutting Regulations that are Unnecessarily Burdensome Act of 2015).  Americans for Tax Reform supports this legislation, which creates a BRAC-style commission tasked with ferreting-out obsolete or excessive rules for amendment or elimination.

Many regulations are too difficult to interpret, requiring businesses and individuals to enlist professional help.  On Friday the House will consider the Providing Accountability Through Transparency Act of 2015, H.R. 690.  Americans for Tax Reform supports this legislation as well. It requires agencies post an easily accessible 100-word plain language summary of any new regulation online.

Together The SCRUB Act and the Providing Accountability Through Transparency Act will help streamline and modernize our federal regulatory system.

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Taxation Without Representation; The Collateral Damage of Crony Capitalism

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Posted by Katie McAuliffe on Monday, November 16th, 2015, 4:42 PM PERMALINK


For several years now, big box retailers have been pushing Congress to implement sales taxes on the interstate transactions that the Supreme Court has ruled off-limits baring legislation..  While these big box stores claim to be after “parity”, the end result would be punitive to small mom-and-pop retailers that are less well equipped to navigate the considerable red tape and audit threats from thousands of taxing jurisdictions around the country.

The irony is that the big box stores have wrapped themselves in the mantle of “main street” and neglect to mention that the real impetus for the federal institution of online sales taxes comes almost exclusively from the biggest retailers in the country.  Ten of the biggest ten retailers in the country are pressing for interstate sales tax legislation, and even eight of the top ten internet retailers are pushing for taxation.

The two main bills being pushed by the big box retailers this year are the Remote Transactions Parity Act (RPTA) and the Marketplace Fairness Act (MFA). In addition to the tax increases on consumers they both layer more regulatory burdens on small businesses and set a dangerous precedent for taxation without representation by extending collection duties and audit targets outside a state’s own borders.

Many state governors and their allies in the legislatures have made allies of the big box stores in their attempts to pass online sales tax.  In working to feed the monster of big government, the alliance of the retailers and government officials is making exactly the point Carly Fiorina was trying to get across on Wednesday night: Big government benefits the powerful and well-connected.

Don’t believe the claims of the tax-and-spend crowd at the state level when they claim citizens already owe the tax and they can’t collect it.  The truth is that as a practical matter almost no attempt is made to collect “use” taxes because they are deeply unpopular and most taxpayers don’t believe they owe them.  The taxing authorities want someone else to collect their taxes for them; hence the idea of forcing online retailers in other states to do their dirty work for them.

 

Then when the businesses in other states run afoul of one or more of the thousands of taxing jurisdictions they can look forward to countless audits and lawsuits, with no recourse to any elected official that needs their votes.  The online sales tax isn’t about “leveling the playing field” or giving states taxes they need and deserve; it’s about vastly expanding the powers of states beyond their borders.

Should either online sales tax bill become law, online retailers will be faced with over 10,000 complicated tax codes, including 45 state sales taxes and local tax jurisdictions. 

 

The costs of imposing these online sales tax proposals represent another big hit to small businesses.  While the bills provide for “free” software and installation, the cost of maintenance and upgrades would range in the hundreds of thousands of dollars.  These costs will have little effect on larger corporations, but it will certainly stifle smaller businesses.

These bills are vastly unpopular with voters across the spectrum.  According to polling conducted by the National Taxpayers Union and the RStreet Institute, 57 percent of respondents were opposed to an online sales tax.  Broken down by party affiliation 65 percent of Republicans, 56 percent of Independents, and 48 percent (to 43 percent) of Democrats were opposed.

In an attempt to force the tax through, legislators have actually held hostage a vote on The Internet Tax Freedom Forever Act.  This legislation would make the current Internet Tax Moratorium permanent, ending any possibility of states taxing Internet access, and ensure that there are no discriminatory taxes on e-commerce.  But the powerful interests have blocked the bill unless and until some kind of online sales tax is attached to it.

In the Republican debate, when Carly Fiorina reminded us that big government benefits the rich, powerful and well connected she made critical points.  When she said, “Government trying to level the playing field between Internet and brick and mortar causes a problem,”  she was right on target. 

Internet sales taxes are about the most powerful retailers in the country raising taxes on their competitors.  It’s that simple.

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Chicago’s “Amusement” Tax is No Laughing Matter

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Posted by Katie McAuliffe, Timothy Wilt on Monday, July 13th, 2015, 4:20 PM PERMALINK


Convenience has a new price for Chicago residents. Thanks to a fiat administrative declaration by Chicago’s Department of Finance, residents are now burdened with a new online “amusement services” tax. That means if your billing address is within city limits, you will be forced to pay a 9% tax for services like Netflix, Spotify, and Xbox Live.

The new policy is predicted to generate an extra $12 million in annual revenue for the city, and is seen by many as a feeble attempt to quench the city’s $430 million budget deficit, and the $530 million in increased payments to police and fire fighter pension funds for 2016.

Government bureaucracies operate under a “see what sticks” mindset, and have no qualms about throwing all types of new taxes on the Internet regardless of legal precedent and future effects.  Chicago already has one of the highest sales tax rates in the country at 9.25%. Now, the tax collector can literally infiltrate the living room.

The meager money grab by the struggling city is not only bad for Chicago’s economy in both the short and long term, but could also set a dangerous precedent for tax discrimination. Consumers of online amusement services will pay taxes that would not be levied if they had chosen the physical marketplace equivalent. Using the Internet to rent a movie will get you the 9% tax, but buying the movie digitally will be taxed at 9.25%.

This leaves open a number of questions.  For example, Chicagoans pay a cable television tax.  Now if they rent or buy a digital movie from their cable provider, will they be hit with a 9% or 9.25% tax on the movie and then the cable tax on their total bill?  That equals double and discriminatory taxation. Definitely a no-no under the Internet Tax Freedom Act.

In addition to the discrimination, the new amusement tax faces heavy criticism for violating other federal law, state law, and Supreme Court precedent. On the Federal level, the new tax is likely, not only a violation of the Internet Tax Freedom Act, but also the Commerce Clause, and of the first and second prongs of the Supreme Court’s Complete Auto test. On the State level, the Dept. of Finance rulings clash with Illinois’ home rule and uniformity requirements.

Congress could bring more clarity to state tax boundaries by passing the Digital Goods and Services Act.  This legislation would ensure consumers are not punished by multiple taxes when purchasing a digital good or service, modernize Congress’s role in tax policy for interstate and international commerce to better suit the digital age, and clearly establish jurisdiction for the taxation of digital transactions.   

Chicago’s “amusement services” tax is emblematic of the wider government agenda seeking to expand tax revenue by taking advantage of the Internet. The Internet holds the potential for a streamline of new revenue for all levels of government, and the fiasco in Chicago emphasizes the need to establish a federal framework through the Digital Goods and Services Act to combat the trend of government overreach. 

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