A. Goolsbee and J. Zittrain. " Evaluating the Costs and Benefits of Taxing Internet Commerce"
National Tax Journal,  September 1999

For discussion in class Friday, February 23rd

This article is available through: Proquest, EBSCOhost, reserve desk

Instructions for using Proquest and EBSCOhost | Schaffer library electronic resources

1. What is the primary purpose of this paper?
2. Are consumers legally responsible for paying sales tax on out-of-state Internet purchases of goods that are taxed in stores? Is payment of such taxes normally enforced?
3. What is a "nexus?" What relevance does a nexus have for sales tax payments on Internet purchases?
4. Describe the moratorium on new Internet taxes.
5. According to the authors, why does the National Governor’s Association estimate of revenue loss to Internet sales overestimate the actual revenue loss?
6. How does the authors’ estimate of revenue loss compare with the NGA’s estimate?
7. What do the authors say about future revenue losses?
8. Draw a graph that illustrates the "distortions" that the authors refer to in the first paragraph under the heading "Internet Competition with Retail Stores."
9. What do the authors conclude from the empirical analysis summarized in Table 3?
10. What income class benefits most from the non-taxation of Internet commerce? Why?
11. Why is the policy of not taxing Internet commerce becoming less regressive over time?
12. Do the authors think that the administrative costs of collecting Internet taxes will be high or that enforcement of collection will be difficult?
13. Explain the positive externalities (social underprovision) that the authors detail.
14. Briefly summarize the findings presented in Table 5.