Gingrich: No taxes on e-commerce, T1s for all

P.J. Hinton writes "Newt Gingrich, of all people, is made some interesting remarks at the Internet Commerce Expo. He warned attendees to keep an eye on government efforts to regulate the net, exhorting them to keep the politicians and the press educated so that we don't have the "ignorant creating the impossible." He also drove home the need for high speed access in the home. His remark, "to have every home in America have a T1 line," is something that sounds good to me ;-). " No, not every home. Even just my home would be fine.

Comments

He makes a good point

[T.J.Hooker]

The impression I got from this is that he wants the internet community to become more involved with politics at an earlier level.

To date, it seems that the internet community has been very reactive to laws, making protests at the late stages of laws being passed and such.

I believe that newt would like to push internet politics to the front, make it a platform issue that people would have to vote on, not something that people discover only after they have elected someone to office.

Also, any way you look at it, this is still a more intelligent comment than Al Gore "creating" the internet.

--T

Cut Taxes To Pay For New T1 Lines!

[Cassius]

Doesn't make sense, does it? Nor does Newt.

Newt isn't in the loop anymore - ostrasized by his own party.

Even if it were possible, I would not advocate T1 lines to every home. Optics will improve and become cheaper such that within ten years they will make a more realistic wiring option. I would not waste the money now rewiring "the last mile" with T1 capable lines.

Good idea.. no wait, bad idea!

[pspeed]

Good points.

Concerning the privacy issues... I've always personally felt that ubiquity is the one way to handle that. The reason people can track that data today is that it is a handlable problem.

The government could track us today without the internet if they had enough people working for them to stand on every street corner. This just isn't going to happen.

When there are billions of people on the internet everyday it will become much easier to blend into the noise. There will be companies that will sell information about us, just like today with telemarketing phone lists, etc.. But the amount of correlation that goes on today within the internet domain just wouldn't be possible.

Also, as bandwidth propagates it will be harder to find exactly what point of entry was used to connect. This further supports a user's anonymity.

Sure, over time technology will improve and people will be easier to track... but the way things go everything else will advance as well. Tracking one person will always be easy just like today. If the government really wanted to watch one person then they will.

Watching everyone, probably not.

As long as we are aware that abuses are possible, and as long as we are vigilant in our lookout for these abuses, then it will be highly unprofitable to be "caught" abusing the system. If company XYZ tracks our info and company ABC advertises that they don't... who will you buy from?

-Paul (I can't believe how much the SNL ratio has already improved for me. Great job Rob!)

"Carpal tunnel syndrome of the Invisible Hand"

[sethg]

As a counterpoint to all the libertarian cheerleading around here, let me offer the following excerpt from an essay by Brad DeLong, an economics professor at Berkeley. (Click here for the complete essay and click here for DeLong's home page.)

This was written in response to Ira Magaziner's recommendations for government regulation, or lack thereof, on electronic commerce. In the introduction, which I snipped, DeLong gave Michael Froomkin, Hal Varian, and Paul Romer credit for most of the ideas in the essay.

As I read over the Magaziner report, and think about how what it says and leaves unsaid interacts with the other pressures on government policy, I find myself more worried about the future than most of the speakers at the conference. Look at the principles of the Magaziner report: "the private sector should lead," "avoid undue government restrictions," "government should provide a predictable, minimalist, consistent, and simple legal environment," "recognize unique qualities," and "facilitate global electronic commerce." Look at how they are applied: No internet taxes, but also no pools of government money to help provide the public-goods commons for our global electronic village. An information superhighway, as the Vice President used to say, but one without federally-funding. A heavy push to embrace and extend private intellectual property rights. A push to end, worldwide governments' ability to require compulsory licensing as a matter of course. Extension of the property rights of current trademark holders, at least for those with deep pockets. Privacy principles which seem to be honored in the breach because the private sector has not yet led.

It seems to me that Ira Magaziner and his political masters have a view that government is the surveyor of the electronic frontier. The government's job is to draw the property lines--the north boundary of parcel 24 runs from the cottonwood tree to the waterhole--set up rules for selling off the plots, make sure that the railroads get their share of the land, and provide a judge to rule on disputes and a sheriff to enforce the judge's orders.

Now when you are settling a real frontier, this kind of "letting the private sector lead" works pretty well. We may not like what happens to the Indians, or what happens if the judge decides that no witness born in Mexico is credible, or how much land the railroads get, or what happens when the cattle baron has his hired hands homestead all the waterholes in the county. But in the main letting the private sector lead works very well. The Invisible Hand of the marketplace does a good job at guiding people to reach productive and fruitful decisions as to how to use resources as they settle the frontier.

But I suspect that the information economy is going to be different. I may be wrong, but I think it is going to be different enough that the market economy is going to work much less well than we are used to. I suspect that going down the road marked by the Magaziner report is going to leave us suffering from carpal tunnel syndrome of the Invisible Hand.

For one example, consider the push to embrace and extend intellectual property rights. The idea is that by making more information appropriable, we are making incentives better. After all, who is going to finance work if you cannot make money off of it? But when I look at current stock market valuations, I find it hard to believe that many internet enterprises today cannot find financing because investors fear that they will not be able to profit from the consumer value they create. And the dangers of providing broad rights to intellectual property are great.

You see, information goods are what economist Paul Romer calls non-rival. You can sell it more than once. Just because one of your customers is "using" a piece of information doesn't mean that another--or many others--cannot be. This non-rivalry gives the largest producer the potential of unlimited economies of scale. It means that, as Carl Shapiro and Hal Varian write in their Information Rules book, information goods markets will not, cannot look like the competitive markets in which the Invisible Hand works well.

So do we break up every very successful company once a decade? Do we learn to live with natural monopoly and be happy about it? Bear in mind that this time the economies of scale or so large that it is monopoly, and not the early twentieth-century oligopolies that we face. I suspect that in many cases in the future we will find that in market after market the most powerful competitor of the dominant firm is its own installed base, the products that it sold to end users as it was becoming dominant. It seems to me that some leakage or slippage in control over intellectual property may well be desirable.

Good idea.. no wait, bad idea!

[BlackHawk]

At first I found myself agreeing with Gingrich. After the shivers of horror passed, I considered the situation again. After all, we've heard of this before: a chicken in every pot, a T1 in every home!

But consider what the implications of ubiquitous, high-speed access into each and every home would mean. More people on the wire means more traffic, exponentially. More people means a larger consumer base to target with advertising, which means yet more traffic. It also means a larger pile of information to collect, collate and analyze regarding people's online activities. So far, we (seem to) have avoided having that happen on a wide scale. But if almost every person in the country were to be online, representing an unprecedented opportunity for corporate and governmental bodies to tap that information, how long would they resist the temptation?

I think fast access to the wire is good, and ubiquitous access would be best. But the system needs to be capable of handling the strain of greatly increased traffic (which means faster and more robust backbone structure) and the checks and balances need to be in place to discourage wide-spread abuse, by any of its users.

T-1's to every house...

[CodeShark]

Isn't this what the Sprint ION initiative is supposed to ultimately be all about?

I've read alot of the materials about how ION (which is Sprint's way of using ATM to offer multiple services via one line),is planned initially for larger corporate users but as demand grows to include homes (the proverbial "last mile" copper loop) so that with one line we can do phone, fax, internet, etc. all at the same time.

Although I don't know the details, Sprint even had some kind of beta user/tester program in the works (sign me up, Scotty!!)

If you know much about this, feel free to comment!!

Why NOT tax e-commerce?

[coreybrenner]

> Do we *REALLY* want to give ecommerce an inherent tax advantage over local brick and mortar stores, and if
> so, why?

How about we cut taxes on locally-sold goods, too, to even out the disparity?

Why isn't e-commerce taxed? Well, I don't necessarily want to pay the same tax rate for something I buy as, say, someone in a high-tax place like NY, but that's the only place product XYZ is available. Now, XYZ Widget Corp. would love to sell me their widgets, but because it would cost extra money to a) pay NY state taxes on the purchase, b) pay MO state taxes on the purchase (don't think that wouldn't happen... it's government, and they're out to screw you and me), I might be able to do something else.

E-commerce is not taxed for the same reason as interstate commerce is not taxed. It would be a friggin' nightmare to do so and keep all of the tax codes for all of the various municipalities, counties, states, and all the other rubbish in sync.

Besides which, taxing commerce in that sense is just plain stupid. The ripple effect of my purchase of XYZ widgets in NY will help the XYZ widget company to pay its employees, which will then help local car dealerships and grocery stores and such to pay their employees, which will then help to pay fast food stores employees' wages, etc.

At all these steps, where a wage is paid, the government already pulls an exorbitant amount of money from income tax, social security, medicare, and the like.

Why should there be any tax at all? Or, if there is to be a sales tax of some kind, why is there an income tax?

--C

Popular Democracy

[Bendeco]

Your post makes me wonder if this will be the way popular democracy starts to become possible. It would be a cold day in hell before congress would directly enact such a system, but perhaps by having a more accessable route to our representatives, we can start actually make them represent us the people. In other words: "do their jobs".

Cut Taxes To Pay For New T1 Lines!

[angelo]

sorry had to be said...

"Telemachus Sneezed"