The Case of the Conflicted Conservatives

Most Internet entrepreneurs I know are conservative Republicans. Some are very conservative.

They take it as a matter of faith that government cant be trusted, that the government which governs least governs best, and the best government is that which is closest to the people.

The Internet has set these values in conflict. National and international governance tends to be expansive, distant, and difficult to manipulate, but global rules are the only kind that can really be enforced on a global network. Local rules, no matter how well intentioned, tend to look silly when applied to the Internet.

At best, youre trying to catch water with your fingers. At worst, youre in restraint of trade.

Ill take Texas as my first example, since thats the state the Internet entrepreneurs favorite son, George Dubya Bush, claims he runs. Texas recently passed a law that prevents Ford from competing with its dealers, not just in new cars, but in used cars.

The dealers are a major political force in that state and fear anything that limits their power, including those they hold franchises for. From the point of view of a Lubbock auto lot, this makes sense. From the point of view of a Lubbock citizen trying to find a deal online this makes no sense. (Lubbock liberals, by the way, are almost as rare as armadillos in New York City.)

Many areas of commerce face local or state regulation, and that regulation looks clueless in the face of a global network. Wine sales are regulated locally (some counties remain dry), as are gun sales. Tobacco sales must follow state rules, as with car sales and drug sales.

Dealing with such regulations is a headache for any online merchant and, as a business conservative, he or she likely wants complexity done away with. Complexity, in fact, is the main argument against Internet sales taxes. Imagine trying to calculate sales taxes in Georgia, where local option laws mean some places pay as little as 4% on the dollar, others as much as 7%, and where the jurisdictions overlap place names and zip codes.

The proposal from Utah Governor Mike Leavitt (where liberal is a fighting word) seems to be that everyone will pay the states highest rate, and the rest of the money becomes a slush fund governors control. Its simple, and there are just 50 rates.

But sales taxes have traditionally been imposed where the sale happens. Thats why Washington State citizens stream across the border to Portland, Oregon to shop. Where will the taxes be imposed – at the mouse, or the point of delivery? Im just asking, before I decide whether to open an Internet cafi in Portland or an Internet warehouse.

Surveys done by Internet sales tax opponents show well lose lots of sales if we have to impose sales taxes. Thats why conservatives like House majority leader Dick (none dare call him liberal) Armey dont want any Internet sales taxes.

In the end, the question of Internet sales taxes will likely be decided by conservatives choosing which values count most.

Oh, youre smirking because you say youre a liberal? Ill get to you tomorrow.

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