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Saturday, June 30th, 2007
Volume 6, No. 12
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3 Articles
1. Net Taxes Could Arrive By This Fall
2. Chomsky Takes on the World (Bank)
1. NET TAXES COULD ARRIVE BY THIS FALL
(PART 2 OF 2 PARTS)
BY
DECLAN MCCULLAGH
The era of tax-free e-mail, Internet shopping and broadband connections could end this fall, if recent proposals in the U.S. Congress prove successful.
State and local governments this week resumed a push to lobby Congress for far-reaching changes on two different fronts: gaining the ability to impose sales taxes on Net shopping, and being able to levy new monthly taxes on DSL and other connections. One senator is even predicting taxes on e-mail.
At the moment, states and municipalities are frequently barred by federal law from collecting both access and sales taxes. But they're hoping that their new lobbying effort, coordinated by groups including the National Governors Association, will pay off by permitting them to collect billions of dollars in new revenue by next year.
If that doesn't happen, other taxes may zoom upward instead, warned Sen. Michael Enzi, a Wyoming Republican, at a Senate hearing on Wednesday. "Are we implicitly blessing a situation where states are forced to raise other taxes, such as income or property taxes, to offset the growing loss of sales tax revenue?" Enzi said. "I want to avoid that."
A flurry of proposals that pro-tax advocates advanced this week push in that direction. On Tuesday, Enzi introduced a bill that would usher in mandatory sales tax collection for Internet purchases. Second, during a House of Representatives hearing the same day, politicians weighed whether to let a temporary ban on Net access taxes lapse when it expires on November 1. A House backer of another pro-sales tax bill said this week to expect a final version by July.
"The independent and sovereign authority of states to develop their own revenue systems is a basic tenet of self government and our federal system," said David Quam, director of federal relations at the National Governors Association, during a Senate Commerce committee hearing on Wednesday.
Internet sales taxes
At the moment, for instance, Seattle-based Amazon.com is not required to collect sales taxes on shipments to millions of its customers in states like California, where Amazon has no offices. (Californians are supposed to voluntarily pay the tax owed when filing annual state tax returns, but few do.)
Ideas to alter this situation hardly represent a new debate: officials from the governors' association have been pressing Congress to enact such a law for at least six years. They invoke arguments--unsuccessful so far--like saying that reduced sales tax revenue threatens budgets for schools and police.
But with Democrats now in control of both chambers of Congress, the political dynamic appears to have shifted in favor of the pro-tax advocates and their allies on Capitol Hill. The NetChoice coalition, which counts as members eBay, Yahoo and the Electronic Retailing Association and opposes the sales tax plan, fears that the partisan shift will spell trouble
.
One long-standing objection to mandatory sales tax collection, which the Supreme Court in a 1992 case left up to Congress to decide, is the complexity of more than 7,500 different tax agencies that each have their own (and frequently bizarre) rules. Some legal definitions (PDF) tax Milky Way Midnight candy bars as candy and treat the original Milky Way bar as food. Peanut butter Girl Scout cookies are candy, but Thin Mints or Caramel deLites are classified as food.
The pro-tax forces say that a concept called the Streamlined Sales Tax Agreement will straighten out some of the notorious convolutions of state tax laws. Enzi's bill, introduced this week, relies on the agreement when providing "federal authorization" to require out-of-state retailers "to collect and remit the sales and use taxes" due on the purchase. (Small businesses with less than $5 million in out-of-state sales are exempted.)
It's "important to level the playing field for all retailers," Enzi said during Wednesday's hearing.
While it's too early to know how much support Enzi's bill will receive, foes of higher taxation are marshaling their allies. Sen. Ted Stevens, an Alaska Republican, said Wednesday that he'd like "to see an impregnable ban on taxes on the Internet."
A taxing question
Pro-tax and antitax forces are jockeying for position before a Net access tax moratorium expires in November. Also on the table: a proposal to usher in mandatory online sales taxes.
Enzi bill: Ushers in mandatory sales taxes on Internet purchases.
S. 156: Renews expiring access tax moratorium permanently.
H.R. 1077: Renews expiring access tax moratorium permanently and eliminates grandfather provision permitting nine states to collect taxes.
H.R. 763: Renews expiring access tax moratorium permanently.
Jeff Dircksen, the director of congressional analysis at the National Taxpayers Union in Alexandria, Va., said in written testimony prepared for the hearing: "If such a system of extraterritorial collection is allowed, Congress will have opened the door to any number of potential tax cartels that will eventually harm rather than help taxpayers."
Internet access taxes
A second category of higher Net taxes is technically unrelated, but is increasingly likely to be linked when legislation is debated in Congress later this year. That category involves access taxes, meaning taxes that local and state governments levy to single out broadband or dial-up connections. (See CNET News.com's Tech Politics podcast this week with former House Majority Leader Dick Armey on this point.)
If the temporary federal moratorium is allowed to expire in November, states and municipalities will be allowed to levy a dizzying array of Net access taxes--meaning a monthly Internet connection bill could begin to resemble a telephone bill or airline ticket with innumerable and confusing fees tacked on at the end. In some states, telephone fees, taxes and surcharges run as high as 20 percent of the bill.
These fees that states levy on mobile phones, cable TV and landlines run far higher than state sales taxes at an average of 13.3 percent, cost the average household $264 a year, and total $41 billion annually, according to a report published by the Chicago-based Heartland Institute this month. Landlines are taxed at the highest rate, 17.23 percent, with Internet access being virtually tax free, with the exception of a few states that were grandfathered in a decade ago.
Dircksen, from the National Taxpayers Union, urged the Senate on Wednesday to "encourage economic growth and innovation in the telecommunications sector--in contrast to higher taxes, fees and additional regulation" by at least renewing the expiring moratorium, and preferably making it permanent. Broadband providers like Verizon Communications also want to make the ban permanent.
But state tax collectors are steadfastly opposed to any effort to renew the ban, let alone impose a permanent extension. Harley Duncan, the executive director of the Federation of Tax Administrators, said Wednesday that higher taxes will not discourage broadband adoption and his group "urges Congress not to extend the Act because it is disruptive of and poses long-term dangers for state and local fiscal systems."
Sen. Daniel Inouye, the influential Democratic chairman of the Senate Commerce committee, said: "Listening to the testimony, I would opt for a temporary extension, if at all."
If the moratorium expires, one ardent tax foe is predicting taxes on e-mail. A United Nations agency proposed in 1999 the idea of a 1-cent-per-100-message tax, but retreated after criticism. (A similar proposal, called bill "602P," is, however, actually an urban legend.)
"They might say, 'We have no interest in having taxes on e-mail,' but if we allow the prohibition on Internet taxes to expire, then you open the door on cities and towns and states to tax e-mail or other aspects of Internet access," said Sen. John Sununu, a New Hampshire Republican. "We need to be honest about what we're endorsing and what we're opposing."
2. CHOMSKY TAKES ON THE WORLD (BANK)
INTERVIEW
BY
MICHAEL SHANK
Noam Chomsky is a noted linguist, author, and foreign policy expert. On April 26, Michael Shank interviewed him about the conflict between Congress and the U.S. president over Iraq and Syria, the scandal enveloping World Bank head Paul Wolfowitz, and the nature of foreign debt.
Michael Shank: Given that the U.S. Congress is no longer calling for binding timelines for troop withdrawal, how is this indicative of a broader struggle between the executive and legislative branches?
Noam Chomsky: There are a number of issues. One is the unitary executive conception. The Republican Party happens to be right now in the hands of a very extreme fringe. That goes from the legal system and the Federalist Society to the executive and so on. What they basically want, to put it simply, is a kind of an elective dictatorship. The chief executive should have total control over the executive branch. And the executive branch should dominate the other branches. That’s an effective mode of authoritarian control, natural for those whose dislike of democracy goes beyond the norm.
There’s a real fascist streak there, definitely. And Congress, to some extent, is trying to recreate more of a balance between the executive and legislative branch. So that’s part of the struggle. Part of it is just that neither party is willing to face the consequences of a withdrawal from Iraq. It’s not a trivial matter. First of all, there’s almost no public discussion of the issues involved in the war. Why did we invade? Why don’t we want to get out?
Shank: Right, it is minutiae now; it is troop numbers, timelines, etc.
Chomsky: That’s right. I was listening to the National Public Radio tribute to David Halberstam the other day, and they had on Neil Sheehan, David Greenway, and others. They were talking correctly about these young reporters in Vietnam who with great courage stood up against power and told truth to power. Which is correct, but what truth did they tell to power? The truth they told to power was: "you’re not winning the war." I listened through the hour and there were never any questions like: should you be fighting the war or should you be invading another country? The answer to that is not the kind of truth you tell to power.
In fact, it’s rather similar to what critical journalists in the Soviet Union were saying in the 1980s. They were saying, “Yeah we’re not winning the war in Afghanistan.” From my point of view, that’s not telling truth to power. Truth to power would be: why are you invading Afghanistan, what right do you have to commit crimes against peace and against humanity? But that question never came up. And the same is true in the discussion of Iraq. The question of whether it’s legitimate to have a victory doesn’t even arise. In fact, the current debate about Iraq reminds me very much of the dove/hawk debate over Vietnam.
Take, for example, Arthur Schlesinger, leading historian, Kennedy advisor, and so on. He was originally a strong supporter of the war during the Kennedy years. But by the mid-1960s, there was a mood spreading in the country generally, but also among the elites, that the war is not wise, it’s harming us. Then he had a book that came out in 1966 called Bitter Heritage, which is very much like what’s happening today. He was one of the extreme liberal critics of the war by then. He said, “We all pray that the hawks will be correct in thinking that sending more troops will bring us victory. And if they are, we’ll be praising the wisdom and statesmanship of the American government in winning a victory in a land that they’ve left in wreck and ruin. But it doesn’t look like it’s going to work.”
You can translate that almost verbatim into the liberal dove critique of the war today. There’s no question about whether we are justified in invading another country. The only question is: is this tactic going to work, or is some other tactic going to work, or maybe no tactic and it’s costing us too much. And those are the limits of the presidential debates, the congressional discussion, and the media discussion.
That’s why you can have debates such as those going on now about whether Iran is interfering in Iraq. You can only have that debate on the assumption that the United States owns the world. You couldn’t debate in 1943 whether the Allies were interfering in occupied France. It was conquered and occupied by a foreign power. Who can interfere in it? In fact, it’s the right thing to do, interfering. Or, say, Russia’s Afghanistan: is the United States interfering in Afghanistan while the Russians conquered it? You’d crack up in laughter if you heard that question.
Those are the limits of discussion here. That’s part of the reason the outcomes of the debates are so inconclusive. The issues are not discussable.
First of all there is the issue of legitimacy. Invading Iraq was the kind of crime for which Nazi war criminals were hanged at Nuremberg. They were hanged, primarily, for crimes against peace, i.e. aggression, the supreme international crime. Von Ribbentrop, foreign minister, was hanged. One of the main charges was that he supported a preemptive war against Norway. It’s kind of striking that at the end of the Nuremberg tribunal, the chief counsel for the prosecution Justice Robert Jackson, an American justice, made some pretty eloquent speeches about the nature of the tribunal. After the sentencing, he said, “We’re handing the defendants a poisoned chalice and if we sip from it we must be subject to the same charges and sentencing or else we’re just showing that the proceedings are a farce.” So if they mean anything the principles have to apply to us.
Try to find a discussion of that anywhere, either in the case of Vietnam or in the case of Iraq, or any other aggression.
Shank: Another schism opened up recently between the two branches with Cheney’s comment that Pelosi’s trip to Syria was bad behavior. Do you think Pelosi has a right to speak to Syria?
Chomsky: Of course she does. If you don’t believe in an elective dictatorship, everyone has that right, even the local congressman, even you and I. If it’s a free democratic country you don’t have to follow the orders of the dear leader. The whole discussion is ridiculous. And the fact that she has to defend herself is ridiculous.
The question is: are we living in an elective dictatorship? Or is it supposed to be a free country in which people pursue their interests?
Shank: How much will that [unitary executive] foundation shift if/when the Democrats take over the executive branch in 2008? Will it be more open?
Chomsky: It’ll be more open, but I don’t think there will be fundamental changes. The basic fundamentals are shared by the parties. But the Bush administration happens to be on the very extreme end of a pretty narrow spectrum. So if liberal Republicans were in [the White House] it would also change. The mainstream Democrats by now are kind of liberal Republicans. It’s very hard to make a distinction.
So sure, it would soften the edges. The parties have different constituencies, and you give something to your constituency. The Democratic constituency is more of the general population, the working people and so on. So you give something to them and maybe less to the super rich. But the framework of thinking is almost the same.
Shank: Is the foundation on which the current unitary executive stands beginning to erode? Given the corruption charges facing Paul Wolfowitz at the World Bank, the scandal surrounding Alberto Gonzales, the Justice Department’s firing of attorneys, and the indictment of Scooter Libby?
Chomsky: The struggle over the unitary executive and the elective dictatorship… that’s beginning to erode from internal corruption primarily, not because what it did was wrong. Yes, of course, some of things were wrong, like firing a prosecutor, but that is so minor compared to the array of crimes committed by the administration. It gains its significance because of the conflict over legislative and executive powers.
Take Wolfowitz. The charges against Wolfowitz are maybe correct but pretty minor compared to his record. Forget his involvement in the Iraq war, let’s put that aside, though it was surely significant. He was the ambassador to Indonesia under Reagan. He was one of the strongest supporters of Suharto, who was one of the worst monsters in the modern period, comparable to Saddam Hussein. When Wolfowitz was appointed to the World Bank, Indonesian human rights and democracy activists were bitterly critical because he never lifted his finger to help them when he was ambassador. In fact, he harmed them and they explained how he did it.
Here’s a man who strongly opposes democracy, who strongly opposes human rights. That’s not the myth. The myth is his great ideals. But in his actions, he supported a hideous dictator and in fact he supported extreme corruption. Transparency International ranked Suharto’s Indonesia as the world champion in corruption. This is the man he was defending while at the same time saying that he was going to the World Bank to do something about corruption.
His record with regard to democracies is also outlandish. You may recall in Turkey, to everyone’s surprise, the government went along with the will of 95% of the population and did not let U.S. troops use the country as a base for the war against Iraq. There was bitter condemnation of Turkey in the United States, from Colin Powell and others. But the most extreme was Wolfowitz. He berated the Turkish military for permitting this to happen. He said, “look, you have power, you can force the civilian government to do what we want them to do. The idea that they should listen to 95% of the population is outrageous.” Then he demanded that Turkey apologize to the United States and in fact say that it understands its job to help the United States. A couple of months later he was being hailed as the “idealist-in-chief” leading the crusade for democracy.
Shank: So why is he going down now for a salary?
Chomsky: He’s very much disliked in the Bank. Apparently he’s very authoritarian. So they picked an issue on which to expel him: a kind of corruption issue and a governance issue. And that’s okay. It’s good to see corrupt people go down. But those are not the issues. It’s just like in Iraq or Afghanistan.
Shank: Analysts in the media are questioning whether or not the Bank can redeem itself post-Wolfowitz. Can it redeem itself or is it done?
Chomsky: Redeem itself from what? Through the 1970s, the World Bank and the International Monetary Fund were pressuring countries to take loans, borrow, and create huge debt. They argued that it was the right thing to do. In the early 1980s, with the Volcker regime in Washington, the whole system collapsed and the countries that had taken the debts were hung out to dry. Then the World Bank and the IMF pressured them strongly to introduce structural adjustment programs -- which means that the poor have to pay off the debts incurred by the rich. And of course there was economic disaster all over the world.
That’s the World Bank. They’ve done some good things. I’ve seen some World Bank projects that I think are great. For example, in Colombia the World Bank has supported very interesting projects run partly by the church, partly by human rights organizations. They are trying to create zones of peace, which means communities that separate themselves from the various warring factions and ask the military, paramilitaries, and guerillas to leave them alone. The people that are doing that are very brave, honorable people. It’s very constructive work, and it’s supported by the World Bank.
So again, I think that’s good. But if you look at the overall range of the Bank’s policies, it hasn’t been benign by any means. The Bank would have a long way to go to “redeem itself.”
Shank: So it’s the same problem facing Iraq, the whole conversation is wrong?
Chomsky: The conversation is too narrow. Within the narrow framework, yes, it’s a good thing to get rid of corruption and press for good governance. But there’s a much wider framework…
Shank: …that’s not being talked about.
Chomsky: Right. Take the IMF. The IMF is not the World Bank, but it’s closely related. The IMF’s former U.S. executive director Karin Lissakers accurately described the Fund as the credit community’s enforcer. The IMF is very anti-capitalist. For example, suppose I lend you money. And I know that you’re a risky borrower, so I insist on a high-interest rate. Now, suppose that you can’t pay me back. In a capitalist system, it’s my problem. I made a risky loan. I got a lot of profit from the interest. You defaulted. It’s my problem.
That’s now what the IMF is about. What the IMF is saying, to put it in personal terms, is that your friends and neighbors have to pay off the loan. They didn’t borrow the money, but they have to pay it back. And my friends and neighbors have to pay me to make sure that I don’t lose any money. That’s essentially what the IMF is.
If Argentina takes out an IMF loan with huge interest rates because it’s risky and then they default, the IMF comes along and says the workers and peasants and other people in Argentina have to pay for that. They may not have borrowed it, it may have been borrowed by a military dictatorship, but they have to pay it back. That’s what structural adjustment is. And the IMF will ensure that western taxpayers pay off the bank. It’s radically anti-capitalist, whether you like that or not. The whole system has no legitimacy. In fact the whole debt system in the world, which is crushing much of the world, most of it is fake debt.
If Suharto, one of the biggest debtors in the world, borrows money and ends up the richest man in Indonesia or maybe the world, why is it the responsibility of the farmers in Indonesia to pay it off? They didn’t borrow it; they didn’t get anything from it. They were repressed, but they have to pay it off. And the IMF makes sure that the lenders don’t lose money on their risky loan after making a lot of profit from it. Why should the system even exist?
Shank: The micro version of that in the United States with sub-prime lending is coming back to bite us pretty quickly.
Chomsky: Exactly.
Shank: Are we going to have that kind of awareness on the global scale? Because I think people are realizing that sub-prime lending isn’t working.
Chomsky: It’s bad because vulnerable people were exploited. But at least you can say that the sub-prime borrowers did borrow the money. In the South the people didn’t borrow the money. It was their leadership that did. What do the people of Indonesia have to do with Suharto borrowing money from the Bank?
Take Duvalier in Haiti. He fled with U.S. help, with most of the treasury. Why do the people of Haiti have to pay off the debt? Most debt is just illegitimate. In fact, the United States itself has instituted an international regime that regards these debts as totally illegitimate. They’re called odious debts. It’s the notion that the United States introduced when we “liberated” Cuba. The United States didn’t want to pay off the debts to Spain, so they were dismissed accurately as illegitimate, later called odious debts. The people of Cuba had no responsibility for them.
A huge amount of the debt in the global south is odious debt. Why should anybody pay it?
3. THE CRY OF THE INVISIBLE
IN LATIN AMERICA, POPULIST MOVEMENTS ARE RISING UP AGAINST WESTERN INTERVENTION
BY
JOHN PILGER
In the 1960s, when I first went to Latin America, I travelled up the cone of the continent from Chile across the Altiplano to Peru, mostly in rickety buses and single-carriage trains. It was an experience my memory stored for life, especially the spectacle of the movement of people. They moved through the dust of a snow-capped wilderness, along roads that were ribbons of red mud, and they lived in shanties that defied gravity. "We are invisible," said one man; another used the term abandonados; an indigenous woman in Bolivia unforgettably described her poverty as a commodity for the rich.
When I later saw Sebastiao Salgado's photographs of Latin America's working people, I recognised the people at the roadside, the gold miners and the coffee workers and the silhouettes framed in crosses in the cemeteries. Perhaps the idea for a cinema film began then, or when I reported Ronald Reagan's murderous assault on Central America; or when I first read the words of Victor Jara's ballads and heard Sam Cooke's anthem A Change Is Gonna Come.
The War On Democracy is my first film for cinema. It follows more than 55 documentary films for television, which began with The Quiet Mutiny, set in Vietnam. Most of my films have told stories of people's struggles against rapacious power and of attempts to subvert and control our historical memory. It is this control, this organised forgetting, that has always intrigued me both as a film-maker and a journalist. Described by Harold Pinter as a great silence unbroken by the incessant din of the media age, it assures the powerful in the west that the struggle of whole societies against their crimes is merely "superficially recorded, let alone documented, let alone acknowledged ... It never happened. Even while it was happening it never happened. It didn't matter. It was of no interest".
This was true of Nicaragua in the early 1980s, when a popular revolution began to turn back poverty and bring literacy and hope to a country long dismissed as a banana republic. In the United States, the Sandinista government was successfully portrayed as communist and a threat, and crushed. After all, Richard Nixon had said of all of Latin America: "No one gives a shit about the place." The War On Democracy is meant as an antidote to this.
Modern fictional cinema rarely seems to break political silences. The very fine Motorcycle Diaries was a generation too late. In this country, where Hollywood sets the liberal boundaries, the work of Ken Loach and a few others is an honourable exception. However, the cinema is changing as if by default. The documentary has returned to the big screen and is being embraced by the public, in the US and all over. They were still clapping Michael Moore's Fahrenheit 9/11 two months after it opened in this country. Why? The answer is uncomplicated. It was a powerful film that helped people make sense of news that no longer made sense. It did not present the usual phony "balance" as a pretence for presenting an establishment consensus. It was not riddled with the cliches, platitudes and power assumptions that permeate "current affairs". It was realist cinema, as important as The Grapes of Wrath was in the 1930s, and people devoured it.
The War On Democracy is not the same. It comes out of a British commercial television tradition that is too often passed over: the pioneering of bold factual journalism that treated other societies not as post-imperial curios, as useful or expendable to "us", but extraordinary and important in their own terms. Granada's World in Action, where I began, was a prime example. It would report and film in ways that the BBC would not dare. These days, with misnamed "reality" programmes consuming much of television like a plague of cane toads, cinema has been handed a timely opportunity. Such are the dangers imposed on us all today by a rampant, neo-fascist superpower, and so urgent is our need for uncontaminated information that people are prepared to buy a cinema ticket to get it.
The War On Democracy examines the false democracy that comes with western corporations and financial institutions and a war waged, materially and as propaganda, against popular democracy. It is the story of the people I first saw 40 years ago; but they are no longer invisible; they are a mighty political movement, reclaiming noble concepts distorted by corporatism and they are defending the most basic human rights in a war being waged against all of us.
Cinema and television production are closely related, of course, but the differences, I have learned, are critical. Cinema allows a panorama to unfold, giving a sense of place that only the big screen captures. In The War On Democracy, the camera sweeps across the Andes in Bolivia to the highest and poorest city on earth, El Alto, then follows Juan Delfin, a priest and a taxi driver, into a cemetery where children are buried. That Bolivia has been asset-stripped by multinational companies, aided by a corrupt elite, is an epic story described by this one man and this spectacle. That the people of Bolivia have stood up, expelled the foreign consortium that took their water resources, even the water that fell from the sky, is understood as the camera pans across a giant mural that Juan Delfin painted. This is cinema, a moving mural of ordinary lives and triumphs.
Chris Martin and I (we made the film as a partnership) used two crews and two very different cinematographers, Preston Clothier and Rupert Binsley. They shot in high-definition stock, which then had to be converted to 35mm film - one of cinema's wonderful anachronisms.
The film was backed by the impresario Michael Watt, a supporter of anti-poverty projects all over the world, who had told producer Wayne Young that he wanted to put my TV work in the cinema. Granada provided additional support, and ITV will broadcast the film later in the year. The extra funding also allowed me to persuade the late Sam Cooke's New York agents to license A Change Is Gonna Come, one of the finest, most lyrical pieces of black music ever written and performed. I was in the southern United States when it was released. It was the time of the civil-rights movement, and Cooke's song spoke to and for all people struggling to be free. The same is true of the ballads of the Chilean Victor Jara, whose songs celebrated the popular democracy of Salvador Allende before Pinochet and the CIA extinguished it.
We filmed in the National Stadium in Santiago, Chile, where Jara was taken along with thousands of other political prisoners. By all accounts, he was a source of strength for his comrades, singing for them until soldiers beat him to the ground and smashed his hands. He wrote his last song there and it was smuggled out on scraps of paper. These are the words:
What horror the face of fascism
creates
They carry out their plans with
knife-like precision ...
For them, blood equals medals ...
How hard it is to sing
When I must sing of horror ...
In which silence and screams
Are the end of my song.
After two days of torture, they killed him. The War On Democracy is about such courage and a warning to us all that "for them" nothing has changed, that "blood equals medals".
The War On Democracy has opened at selected cinemas. A DVD collection of Pilger's documentaries, In the Name of Justice, is released by Network.
