Public Policy and the Internet |
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Electronic Commerce, "Disintermediation" and Taxation A new sector of economic activity is what's called "electronic commerce," or buying and selling over the Internet, in some cases using new forms of "digital cash." Some people believe that this may be the way most people in advanced industrialized societies will engage in commerce in the future. If "electronic commerce" and other forms of electronic transactions take off and become common, this will entail a process of so-called "disintermediation," meaning the elimination ofjobs that once managed commercial transactions: store clerks, telemarketing operators, video stores, etc. Some people see this as a great leap forward, a move toward a "friction-free" economy. Others see this as the beginning of the end of our traditional concept of work, with vast collateral effects. What are the policy implications of a society undergoing "disintermediation?" Are we facing a "jobless future" or a new golden age of "friction-free" capitalism? Will the public sector see its revenues plunge as more and more commerce moves to the Internet? This is one of the looming controversies surrounding electronic commerce, or the deployment of Internet resources for economic activity. Most states, for example, do not tax mail order transactions with a customer who lives outside the state. Some communities have tried to impose a tax on Internet-related activity, only to have to withdraw or repeal such proposals. The City of Austin is negotiating a "franchise fee" on telecommunications carriers, which some people regard as a tax and others see as fair payment for the use of rights-of-way. Imagine it is fifty years from now. What are the taxes on Internet activity? How would these be imposed and monitored? If we don't have taxes on electronic commerce, how will the public sector be funded? Readings: The End of Work, Jeremy Rifkin, Chapters 1-3, Chapter 11. On reserve, Public Affairs Library. |
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