Tom Vilsack on Technology
Democratic IA Governor
We should create a fund, a Digital Communities Account. Making resources available to communities through the account will accelerate the understanding of the importance and the potential of being connected. Such an understanding will create the demand for services to which the private sector will respond.
The strong anti-government sentiments of the early 1990s have subsided, but most Americans still think government is too bureaucratic, too centralized, and too inefficient.
In Washington and around the country, a second round of “reinventing government” initiatives should be launched to transform public agencies into performance-based organizations focused on bottom-line results. Many public services can be delivered on a competitive basis among public and private entities with accountability for results. Public-private partnerships should become the rule, not the exception, in delivering services. Civic and voluntary groups, including faith-based organizations, should play a larger role in addressing America’s social problems.
When the federal government provides grants to states and localities to perform public services, it should give the broadest possible administrative flexibility while demanding and rewarding specific results. Government information and services at every level should be thoroughly “digitized,” enabling citizens to conduct business with public agencies online.
The nation’s governors have a strong and unified message to Congress: deal fairly with Main Street retailers, consumers, and local governments. In a letter sent to all members of Congress late Friday, 44 governors said:
If you care about a level playing field for Main Street retail businesses and local control of states, local governments, and schools, extend the moratorium on taxing Internet access ONLY with authorization for the states to streamline and simplify the existing sales tax system. To do otherwise perpetuates a fundamental inequity and ignores a growing problem.The current moratorium on Internet access taxes, like those consumers pay to Internet service providers, and multiple and discriminatory taxes is scheduled to expire in October. The moratorium does not apply to sales taxes.
Currently, sales and use taxes are owed on all online transactions, but states are prohibited from requiring “remote sellers” to collect and remit those levies. A 1992 US Supreme Court decision said states can only require sellers that have a physical presence in the same state as the consumer to collect so-called use taxes. In instances when a seller does not have a physical presence, consumers are required to calculate and remit the taxes owed to their home states at the end of the year. The problem is most people are unaware that they’re supposed to pay, and states lack an effective enforcement mechanism. Online and catalog sellers, thereby, have a significant price advantage over Main Street businesses that must collect a sales tax on all transactions.
The loophole creates serious budget problems for schools, states, and local governments. A study estimated that states could lose as much as $14 billion by 2004 if they are unable to collect existing taxes on Web-based sales. Nearly half of state revenues come from sales taxes.
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