The Badger Herald

OPINION & EDITORIAL

iTax kerfuffle

Looking for a print version?
Simply choose ‘Print’ on your computer and a printer-friendly document will be generated.

Also by Badger Herald Editorial Board:

Still miffed (May 7, 2008)
A lacking response (May 6, 2008)
The block is hot (May 2, 2008)
Madison's Downtown: The Musical (May 1, 2008)
The real 'State of the ASM' (April 29, 2008)

by Badger Herald Editorial Board

Monday, February 26, 2007

As the late French finance minister Jean Baptist Colbert once said, "The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing." This wisdom is evidently lost on Gov. Jim Doyle.

In Mr. Doyle's recently proposed budget, the governor aims to hit consumers with a 5 percent sales tax on all electronically purchased digital goods. These products will include downloads from the iTunes Music Store, prompting opponents to dub the measure the "iPod tax."

Mr. Doyle's tax is problematic on several levels.

First, under current law, consumers are already required to report on their income tax returns purchases of tangible goods they buy electronically. Mr. Doyle's tax would be levied in the same way. Consumers would be required to keep track of all of their digital purchases and report them at the end of the year on their tax returns.

Sound a bit unreasonable? It would be, and most people simply wouldn't do it.

Therefore, the tax would end up putting many average, otherwise law-abiding citizens — and a lot of students — on the wrong side of the law.

Second, proponents of the tax cite current "inequality in the taxing process" between tangible and digital goods. While this is certainly true, the market for digital good is relevantly unique. There's something to be said for continued laissez-faire treatment of this still-burgeoning market and, more broadly, the Internet at large.

Additionally, positive innovations are pushing even price-sensitive consumers away from the Napster of old and instead toward legal alternatives like the iTunes Music Store. It makes us wonder why anyone would be interested in stifling this transition to legitimacy.

Besides, the Wisconsin Department of Administration estimates the tax would only bring in $6.3 million over two years — a paltry sum compared to the estimated $1.6 billion state deficit.

When Mr. Doyle last proposed this tax back in 2005, the Legislature's Joint Finance Committee killed the measure. Unfortunately, following the November elections, the governor's second push holds more promise.

However, some state legislators have vociferously opposed the new tax. Notably, state Rep. Scott Suder, R-Abbotsford, has promised to introduce a budget amendment opposing the measure.

As University of Wisconsin public affairs and applied economics professor Andrew Reschovsky told The Badger Herald last week, Mr. Doyle's tax could be difficult to levy and may end up being largely "symbolic." We agree — symbolic of a government quite obsessed with expanding its pesky feather plucking into an otherwise unfettered electronic frontier.

Feedback

Show all comments

Hide anonymous comments

Anonymous (February 26, 2007 @ 12:11pm):

Doyle, you moron, interstate sales did not begin with the internet. Americans have never had to pay tax on items purchased from mail-order catalogs or info-mercials.

Sales tax is something you don't want to mess with too much, brother. You should ask the British what happened to their tea in Boston.

Someone should warm up the impeachment machine, just in case.

Anonymous (February 26, 2007 @ 1:12pm):

Fortunately the Editorial Board is very concerned about Doyle's State Taxes, I suppose ASM's own Student Taxes really don't matter. It does make sense that we can affect Doyle more than our student government. Too bad we don't have our "Student Government" (those were the days).
- Germain E. Stemme.

Add a comment

We welcome your thoughts, but please keep your feedback thoughtful, on-topic and respectful. Offensive language, personal attacks, or irrelevant comments may be deleted.