Negotiating Computer Taxes and the Public Interest

Marcus Breen


Recent developments have seen a determined move by computer industry representatives and some political activists to establish a tax free haven for computer mediated communication developments, especially electronic commerce. Such a position has been expressed by US advocates of the Internet Tax Freedom Act. “The Internet Tax Freedom Act is a law enacted in October 1998 to keep the heavy hand of government off the Internet. If you want information about how this new law will work to keep Internet access tax-free, to stop governments from imposing special or discriminatory taxes on the Net, and to keep foreign tariffs off of Internet commerce, you’ve come to the right place”.

Partly premised on the argument that taxes are an disincentive to investment in research and development and thus a limit on innovation and trade, computer industry arguments have been generally well received by federal and state governments in the USA. In fact, since 1996, the US government, together with its Japanese counterpart, has agreed not to impose taxes on companies undertaking specific innovations for new communications technology. The tax free “window” has been opened for 2-5 years, raising debate about the tax exceptions the industry has won. However, the idea of community is problematized by the victory of industry over government. In the past, prevailing liberal political philosophy has set acceptable thresholds for the imposition of government tax collecting as a means of maintaining the integrity of “the public” within the contingent meaning of the sense of community. To remove taxation is in effect to remove the contingent element of government. In other words, the agreement not to tax may mark the end of rational arguments for government.

For ethicists in political science and political economy, taxation and computer science, and policy analysts and policy makers in all those areas and more, the removal of taxation opens a Pandora’s box of issues. Some of theses issues can be theorized within the range of concerns defined by cultural studies. For example, what cultural issues and ideas are being exclusively articulated to emerging computer communications that need to be mapped. Furthermore, are the issues of certain vested interests being given precedence, within terms that are generally defined as libertarian. That is, do the ethical issues implicitly enumerated by anti-tax advocates reveal the unraveling of cultural and political systems of thought and behavior that may present a dramatic remaking of the political landscape. Deliberations on this issue are sure to continue as computer communication offers a borderless new world order, in which governments no longer rule and new methods of communication give new meaning to “the public interest”. This paper will consider the cultural issues that emerge from this development and how such issues problematize ethical considerations of the state and the public interest.