CEI Daily - Internet Sales Tax, Farm Subsidies, and Ethanol


Internet Sales Tax


California lawmakers want to start collecting state sales taxes from out-of-state Internet purchases.


Adjunct Analyst Jessica Melugin explains why California's proposal is a bad idea.

"If every tax jurisdiction followed [California's] suit, companies with affiliate programs would be forced to remit sales taxes in a nationwide maze of more than 7,500 different jurisdictions -- each with different rates and exemptions -- creating a costly accounting nightmare and a burden on interstate commerce.

    An origin-based tax regime, based on the vendor's principal place of business instead of the buyer's location, will address the problems of the current system and avoid the drawbacks of California's plan. This keeps politicians accountable to those they tax."




Farm Subsidies


Lawmakers are finally starting to look seriously at cutting farm subsidies.


Adjunct Scholar Fran Smith explains.


"With farmers making record profits, yet still getting heavily subsidized, some policy makers are setting their sights on direct payments to farmers of about $5 billion per year. Last year total farm subsidies were about $15 billion.

    Corn farmers are the ones who benefit most, with about $2.1 billion of those direct payments going to them.

    Even some industry organizations see the need for some cuts in agricultural support."






The Department of Agriculture is going to start pumping money into the ethanol industry by assigning grants for the installation of ethanol blender pumps.


Policy Analyst Brian McGraw criticizes this new show of federal support for ethanol.


"When really pressed on why the USDA and the Obama administration continue to support corn based ethanol, they point to using it as helping support the fledgling cellulosic ethanol industry, which seems to always be just 5 years away from commercial viability."