The Subsidy and Social Welfare Implications ofE-Commerce Sales Tax

摘要

There is importance and timeliness in the issue ofInternet taxation. Internet commerce is growingexponentially. With this growth comes the potential fortremendous tax revenue, as well as criticism for receivingan unfair tax advantage. One of the benefits of theInternet is its lack of national and geographicalboundaries. However, this lack of boundaries makestaxation and regulation of the Internet difficult, ashistorically geographical boundaries have helped todetermine policies. One of the needs of a taxation policyfor e-commerce is that it is consistent with establishedtaxation policies both domestically and internationally.The tax policy chosen for internet commerce in the U.S.will, as a result, affect not only the internet commerce inthe U.S., but also other forms of commerce within andoutside of the U.S. This paper will address theimplications of the current tax exemption on efficiencyand social welfare.