Dale C. Mead, Republican Candidate for Congress, 15th District of California  

Information Warfare |Internet Sales Tax | Junk Email | Your Requests or Comments

Information Warfare

Information Warfare involves one government hacking the technology infrastructure of another to gain military advantage. As we move more firmly into the information age, it is easy to see the kind of advantage that could be gained. An attacker could remotely re-route railcars of raw materials away from factories, or send a forged message to a general that a cease-fire had been signed, or re-program a computerized lathe in a gun factory to introduce defects.

The dangers of information warfare or information terrorism are recognized in military circles; however, much of the Internet infrastructure being built out is extremely vulnerable as the recent, relatively unsophisticated Denial of Service attacks against Yahoo, Amazon, and others demonstrate. The Internet was built around trust and the idea that if someone was doing something bad that your admin would call their admin and get the bad guyís account terminated. In information warfare, of course, you wonít have the cooperation of the enemy government, or, in many cases, the cooperation of neutral governments in stopping the attack.

Industry security experts, along with the hacker community itself to some degree, are doing a good job of closing down unintentional security holes. However, the Silicon Valley has traditionally paid little attention to the military consequences of its products except as specified in sales to the armed forces. The assumption is that ordinary commercial products donít have to consider military types of security needs. Silicon Valley hiring and code review practices donít start with a concern about how an operative could plant a few lines of code into a router software update allowing an obscure command to shut down the entire networking infrastructure. (Remember, "Virtually all Internet traffic runs on the products of one company." Actually, a few companies could legitimately make that claim). The telephone infrastructure presents similar risks. Worker shortages mean that companies arenít likely to look carefully at the background of qualified coders.

There may not be as much need for lawmaking here as for industry awareness or cooperative development between industry and the military. The time of worry about this, however, is now, not in the middle of a major attack that is impacting the entire economy.

Internet Sales Tax

It is reasonable to assume that if I go down to my local retailer to buy an item, I should pay the same amount as if I called the store on the phone and order it and that clicking on a button on the storeís web page shouldnít make any difference. Assuming that the store is in the same state that I am in, that is pretty much the way it works.

However, if I go to a store in another state, I will usually pay the local sales tax. If I call the store on the phone in response to a catalog, I probably wonít have to pay any sales tax at all and the same is true if I order the item on the Internet. This hurts local stores because customers get a tax break for ordering online from out of state instead of the local company. It also cuts into the tax revenue of the local government.

Sales tax has always been somewhat problematic for local governments because it is based on where the transaction takes place. When small towns set up large regional factory outlets outside of large cities, it is largely to gain sales tax revenues that would have gone to the larger cityís government. Cities frequently give preferential treatment to Auto-Row districts for much the same reason. Mail order made this problem worse because mail order houses frequently do not collect taxes on out-of-state transactions. However, because the expectation is that the amount of sales occurring on the Internet will be vastly greater than mail order, government is justly concerned about the impact of eCommerce on their revenues.

Traditional sales tax simply will not work on the Internet. If we calculate the tax on the retailerís location, the retailer will simply move to a low sales tax state or off-shore and keep doing business, since their business does not depend on location. If we tax based on the location that the article is shipped to, we create an unmanageable situation where the retailer has to track all of the local nuances of how items are taxed and at what rate in every taxation district in the United States and create a method for keeping up with changes in the taxes and for submitting taxes to each taxation authority in accordance with its laws. Congress should not consider allowing destination-based taxation of interstate commerce without the state and local governments proving that there exists a workable method for retailers to determine the applicable taxes at the time of sale and to submit the taxes in a reasonable manner.

If sales tax continues to be the preferred method of financing local government, we should consider a complementary national tax at a single rate on otherwise untaxed goods in interstate commerce. The proceeds of this tax would be distributed to the states (who might or might not distribute it locally). This obviously will not be popular with the mail order and eCommerce retailers that it would apply to (or with their customers), but it would close the gap between them and local retailers and would close a tax loophole.

Junk Email

Junk mail, junk phone calls, and junk email are all unwanted intrusions into peopleís lives. As I have said elsewhere, I believe that there needs to be some regulation of all of these intrusions. Junk email, because it is so cheap, is a growing problem. All of these need to be regulated.

The constitution guarantees freedom of speech and that includes the freedom of commercial and political speech. This right is not without limitation, however, and needs to be balanced against other rights. Where a junk emailer may spend a few hundred dollars on sending a message that email may cause hundreds of thousands of dollars in cumulative cost to the national economy because "You have mail" may mean a message from your boss. The volume of untargeted messages is counterproductive even to other junk emailers because many people donít have time to even figure whether a particular piece of mail is valuable to them.

Responsible mass emailers put email addresses on their list only when the person has requested it and provide a simple means to get off if the person doesnít want to be on the list any longer. This responsible behavior should be the basis for legislation on all junk commercial intrusions into peopleís private lives.


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Copyright: 2000, Dale C. Mead for Congress Committee