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An Open
Letter From Pennsylvania’s Commonwealth Foundation on taxation of
internet transactions:
June 14, 2001
Rep. David
J. Steil
Room 427 –
South Office Building
Main Capitol
Harrisburg,
PA 17120
Dear Rep.
Steil:
Your June 8,
2001 memorandum to the membership of the House of Representatives
concerning The Commonwealth Foundation’s factual May 31, 2001
communication on House Bill 900 contains deliberate and outright
falsehoods and I write to urge you to retract this memorandum immediately.
Allow me to
detail the errors and omissions in your memorandum.
You assert
that in our May 31 piece The Commonwealth Foundation said House Bill 900
“would force consumers to pay more for all purchases they make online or
from catalogues.” This
is a deliberate distortion of what we said.
Here, verbatim, are the first two sentences of the memorandum from
which you excerpted a quote:
“A
high-pressure push is on to
add Pennsylvania to the list of states that agree to force
consumers to pay more for all purchases they make online or from
catalogues. House
Bill 900 is the first and essential step in this anti-taxpayer effort
being orchestrated by national organizations such as the National
Governors’ Association.” (emphasis
added).
These
sentences are wholly and completely accurate and for you to tell your
colleagues otherwise is false.
You
deliberately omit any discussion of a central goal of the Streamlined
Sales Tax Project (SSTP), which House Bill 900 would affiliate
Pennsylvania with. The SSTP
would allow states to collect sales taxes on all remote purchases, some of
which are now not subject to sales taxes. (Our May 31 memorandum does deal
with the question of the state Use Tax.)
The U.S. General Accounting Office notes that in its first year,
the SSTP plan would cost Pennsylvania consumers as much as $375 million.
Since you
cannot challenge the accuracy of the econometric model that predicts that
Pennsylvania will forfeit up to 94,000 jobs as a result of the
implementation of the SSTP you disingenuously refer to it as a “strategy
for obfuscation.” Before
they vote to affiliate Pennsylvania with the SSTP, your colleagues need to
know what the potential economic effects of the expanded sales tax
authority contained in the SSTP will be.
Obviously,
you did not bother to review the 47-page manual on this model that we
provided to you at your request and in the interest of open dialogue. The model measures the precise effect of using the sales tax
to draw as much as an additional $375 million out of Pennsylvanians’
pockets and into the state Treasury in the first year.
This is precisely what the SSTP, that you are pushing Pennsylvania
to join, would do. This
econometric model has been tested; it is accurate.
You may not
want your colleagues to face these facts – and facts they are – but we
believe it is essential that the Legislature be fully informed before
action is taken on legislation.
Finally, the
false and misleading nature of your memorandum is underscored by the fact
that you referenced me and this organization by name and did not give us
the courtesy of receiving a copy. Obviously,
you knew that we would immediately point out the errors and omissions in
it and therefore chose to not share it with us.
I would note, in contrast, that we have sent you copies of our
correspondence on this matter and, further, we have hand-delivered
additional materials to your office and to your committee staff.
I find it
ironic that you assert that our accurate memorandum of May 31 “drive[s]
a spear through the heart of honesty and public discourse.”
That is precisely what your misleading and deliberately false
memorandum does.
Members of
the House can accept or reject the facts surrounding the Streamlined Sales
Tax Project – facts that are at the core of concerns raised by us,
Citizens Against Higher Taxes, Americans for Tax Reform and the American
Legislative Exchange Council (ALEC).
That is their right. But
to distort and misrepresent the views (and personally insult the
integrity) of those of us who have honest and sincere disagreement with
your position on the national sales tax plan is unfortunate and
contemptible.
Please
retract this memorandum.
Very truly
yours,
Sean Duffy
President
C: All
Legislators
Gov. Tom Ridge
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