Sohodojo Advisory Board Member
Jim Schneider
The Taxman86 Speaks...
10 May 2000
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It is the Wild Wild West but the lawyers are making all the money; What is the eContract 2000; and Will Zero Capital Gains Zones become a reality?
1. It is the content stupid!
Two front page articles suggest that the real fight is over the way "content" will be delivered over the Internet, with the lawyers the real winners in this one, as always. Some think that Microsoft is too big and needs to be broken up, some think not and so does Microsoft as it marches into the "content" distribution world. (Related LA Times article is now archived. It may be accessed for a fee.)
However the New York Times front page suggests that the independent software developers will win out. "The Concept of Copyright Fights for Internet Survival." As the two articles point out, high priced lawyers are fighting it out in unfamiliar territory.
We suggest that the Internal Revenue Code is in the same position, with new tax theories being developed around the Internet. If the Web site is the business, where is it? If the Web site has been trademarked, where is the trademark? Will the Internet Tax Moritorium have an impact on this issue? The Industry Standard, Smart Business for the New Economy and others are pumping out daily articles on these subjects. In some cases it can be seen on live Web Casts.
2. What is the eContract 2000?
If there is a promoter of the Wild Wild West it may be the House Republican Leadership. They have pushed the Internet Tax Moritorium for a floor vote today, and its passage is assured. Then off to the Senate.
Will this make a big difference? It might to Blockbuster who will soon be selling pay-per-view over satellite according to the L.A. Times; from a tax free jurisdiction, we assume.
3. Digital Divide or Digital Opportunity, or is it just the market place.
Washington, D.C. is booming we are told, and high technology is coming into the District from the suburbs. Is it their ZERO Capital Gains Zone or is it the urban environment? Or, maybe it is the Washington Post, with their daily pitch for the District.
We suggest that the lawyers, consultants, and others are setting up a tax free zone [after two years] without the Washington Post even knowing about it? Is that possible, we doubt it. We suggest you check out Title II to H.R. 4358, entered on May 2, 2000 (See http://thomas.loc.gov.) If it is good for Washington, D.C. how about the other 125 Empowerment Zones/Enterprise Communities [Los Angeles, New York, Chicago, San Francisco, Oakland, etc.] If you agree then make some noises to your local Congressman that H.R. 815 is important NOW!
Jim Schneider, LL.M.
Taxman86
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