“New economy” taxes are sneaky double taxation

While Americans are observing tax day this week, your state government is preparing a cruel gift - double taxation on some of your favorite goods and services.

Republicans in the Iowa Legislature are debating tax reform plans, with promises to cut most Iowans' income tax burdens. However, they also appear likely to impose new taxes on the 'new economy,” including Uber, Netflix and online shopping. Many Republicans and Democrats alike have complained for years that online sellers and service providers aren't paying their fair share compared to traditional businesses.

The most ethical taxes are the ones where revenue covers the costs generated by the activity being taxed. For instance, fuel taxes to help pay for transportation projects are among the least-bad taxes. Iowa's 'new economy” tax proposals clearly do not serve that purpose.

Consider that Uber drivers already pay registration fees, vehicle taxes and fuel taxes; Netflix users and their internet providers already pay telecommunications taxes; and while online shoppers can sometimes avoid sales tax, online retailers don't create the same burden on public infrastructure as their brick-and-mortar competitors do.

'Don't tax the new economy. One of the reasons the new economy is thriving is because government hasn't regulated and taxed it,” former Cedar Rapids mayor and recent GOP gubernatorial candidate Ron Corbett said during a legislative hearing this week.

This is nothing but another government revenue grab. Happy tax day, Iowa.

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