The National Governors Association (NGA) will meet in Washington, D.C. late this week.  No doubt, most of these governors will be pushing to expand the reach of state and local tax collectors onto the Internet and into other states.

These politicians from both major parties want to stop Congress from extending the current ban on Internet taxes.  They also want Congress to make it easier for them to have businesses in other states collect their sales taxes.

These governors-including former anti-tax stalwarts like John Engler of Michigan and Tommy Thompson of Wisconsin-have raised the specter of lost education funding and widening the so-called digital divide.  Many governors-such as South Dakota's William Janklow-have decried the fact that consumers can buy products from out-of-state businesses-on the Internet or through catalogues--without paying sales taxes.

After all, governors and other state and local officials don't like use taxes, which require consumers to voluntarily tell their state and local governments what they bought from out-of-state retailers, and to pay the appropriate tax locally.  Of course, practically no one pays use taxes.

In reality, revenues are flooding the coffers of state and local governments due to economic growth resulting from high technology development, including the Internet.  And the idea that businesses should have to take on the mighty costs of becoming tax collectors for thousands of governmental jurisdictions around the country is not only perplexing, but also preposterous.   Somehow, these governors want us to believe that allowing state and local government to tax Internet access and extend the reach of their sales taxes will benefit the economy and the poor. 

All these politicians really want is to get their greedy hands on more of the taxpayers' money.  They want more and more revenues to feed their insatiable desires to expand the size and reach of government.

In the end, the correct Internet taxation policy is to make the current ban on Internet taxes permanent; eliminate use taxes altogether; and allow states and localities to compete to attract businesses and consumers by keeping taxes low.