The Man Who Taxed the Net

Ron Kirk is not just a savvy politico and the mayor of Dallas. He's the guy who wants to tax Net and mail order purchases. As a member of a Congressional commission, he's in a position to do it. Declan McCullagh reports from San Francisco.

SAN FRANCISCO -- Ron Kirk was once a reluctant proponent of Internet taxes.

The 45-year-old mayor of Dallas, Texas didn't really want to become known as the Man Who Taxed The Net. After all, there were tech firms like Dell and Texas Instruments nearby. And fatter credit card bills were no way to attract votes.

Since then, Kirk has become the most prominent pro-tax voice on the Congressional advisory commission meeting this week -- as firmly attached to the idea as a Rottweiler with lockjaw.

"We're trying to treat all transactions equally," he said during an interview Tuesday evening with Wired News.

Kirk's plan, essentially the same as one proposed by the US Conference of Mayors, would require US shoppers to pay their local sales taxes whether buying a product online or via a toll-free number. If a voluntary trial doesn't work, Kirk wants to make it law.

"It would make more sense if it were mandatory," says Kirk, a member of the US Conference of Mayors advisory board.

The proposal requires both traditional catalog and mail-order firms and dot com businesses to collect sales tax as soon as the customer types in a shipping address. Then, Kirk says, companies "can make sure" the proper sales tax is added to the order.

Kirk has also said Congress could enact a national sales tax.

In three days of meetings by the tax commission to date -- and at the San Francisco meeting in particular -- Kirk has emerged as an anti-libertarian, a folksy fellow who skips economic analyses and instead talks about "fairness" and "equitability" in his distinctive Texan drawl.

In an effort to ridicule the views of the Heritage Foundation and other opponents, Kirk said during Tuesday's meeting: "If you've got a line that says pay yer taxes and one that says don't pay yer taxes -- well, in the words of my 7-year-old, 'duh!'"

He dismisses the views of the conservatives and libertarians who testified as hypocritical: Talking up states' rights, then ignoring them.

"There's a certain hypocrisy in the position they're taking," he said, and claimed that groups like Heritage are simply hoping to get donations from dot com firms.

The approach seems to be working. Free-market advocates ended up feeling like an Allied squadron during a World War II sortie over Berlin. One person who testified as an expert confided Tuesday that "we lost this afternoon."

Kirk may have managed to persuade, or at least neutralize, some of the corporate representatives on the commission. "The business folks have been very reasonable on this issue," he says.

But the law creating the commission requires a two-thirds vote for a formal recommendation, and that still appears to be elusive. "You're not going to get a two-thirds majority.... There will be nine to 10 votes in favor of some form of tax," Kirk says.

There are 19 commissioners, representing tech firms, public interest groups, the Clinton administration, and state and local governments.

But Kirk says he won't give up.

"This is a very different world. We ought to accept this challenge," he says.