Yuletide shoppers in the US have been warned that using the Internet for online commerce will bring about the closure of local shopping malls and other retail outlets.
A tripartite group made up of the National League of Cities, the National Governors Association and the National Conference of State Legislatures issued its alarmist warning in a report entitled 'The New Global Economy: Leaving State-Local Tax Structures Behind.' The report focuses on the tax burden faced by real world retail outlets which online shops do not currently have to pay.
Legislation is currently going through the US Congress which would exempt the Internet from existing taxes which the group warns would undermine local government?s ability to provide services as well as preventing real world shops from competing effectively.
The report warns: ?Governors and other state and local leaders believe that Main Street merchants who depend on holiday shopping sales should not be placed at a competitive disadvantage to companies selling tax-free goods over the Internet.
"The iniquity will hit rural America especially hard," it continues. "The small corner hardware and clothing stores in towns across America will not be able to compete with businesses selling tax-free goods on the Internet. The bill has the potential to dessicate America's heartland with an impact much like the loss of small family farms."
The report argues that no legislation is necessary to solve what it calls a problem that does not exist. It points out that no state or local government raised taxes on the Internet, while seven states removed or lowered taxes. "State and local govenrments are not rushing to enact new taxes on the Internet," it notes. "So why does Congress feel compelled to propose new legislation. And why now"
"This is not a time for federal legislation that would undermine our Main Street shops and stores," concludes the report, claiming that Congress is behaving like 'Chicken Little' by panicking. "The cyberbusiness sky is not falling," it argues. "Our heartland is businesses and other taxpayers deserve tax policy that is fair and equitable for everyone."
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