Back in Part I, I devoted a detailed discussion about the Internet Tax Freedom Act (ITFA) from the purviews of Production for Profit and Production for Utility. Here, I will be delving into the same legislation in the context of Production for Dasein on behalf of the Work-Standard. Over the past few weeks, I have been developing suspicions about whether the law itself is detrimental to the aims of American Federalism and Hamiltonianism in particular. It turns out that my suspicions had proven to be correct as the law just so happens to antithetical to the concept of a National Intranet in America on constitutional grounds. Many of the legal arguments against it are less technical and economic, which is great because it has been a while since I last wrote something where economic and technological topics played secondary roles.
In any case, ITFA is a Federal law that Jeffersonians passed under the Clinton Presidency and later made permanent under the Obama Presidency. It stipulates that State governments are prohibited from governing the American Digital Economy, which means that the entire American Digital Economy is completely within the domain of the Federal government. This is ironic because, in my conception of Digital Economy from The Digital Realm, the roles of State and Totality (or in this case, the Union and the States–hence “United States”) are reversed. Recall my description of land ownership from The Third Place and how it ties in with The Digital Realm:
- A Totality owns all the Land in their nation on grounds of National Sovereignty.
- They entrust their State to look after the Land insofar as the State is beholden to them.
- When somebody is given Land and Buildings or buys them from the State, ownership is transferred from the Totality to the Self as Personal Property.
- Any Lands and/or Buildings which are owned by Selves are Personal Properties and therefore are incapable of contributing Arbeit and Geld to the Life-Energy Reserve.
- Land and Buildings cease to be considered as Personal Properties if they are converted into Productive Properties with the Explicit Intent of contributing Arbeit and Geld.
It is that sort of arrangement where we find peculiar processes of landownership and property rights exclusive to the Work-Standard and Production for Dasein in particular. In the Real World as opposed to the National Intranet, the State acts as the intermediate between the Totality and the Self. On a National Intranet, the roles are reversed: the State owns the digital infrastructure and entrusts the Totality to govern their nation’s portion of the Digital Realm on its behalf. The Totality is the intermediate within the interfaces between the State and Self.
What ITFA did was prevent the State governments from pursuing any efforts that the Jeffersonians think would bring America on the path toward building its own National Intranet. The law essentially turned the entire Digital Realm into a tax haven of sorts because the World Wide Web (WWW) on its own is inherently borderless, formless, and lawless. That is why the question of political-economic governance and the establishment of social norms and customs have never been taken seriously in the 1990s. It is only now that State are just beginning to entertain the possibility of a National Internet in terms of taxation and regulation.
From a constitutional perspective, the Digital Realm presents challenges on how the Constitution and Legal Code of any nation is supposed to be applied, let alone enforced. Even in a National Intranet (rather than the World Wide Web), existing literature on how Council Democracy and Parliamentary Democracy are supposed to be implemented is scant and remains forthcoming. The Digital Realm represents one of the first forays into that particular endeavor, unfortunately.
Here in America, the argument among State governments regarding ITFA is that ITFA has left much of the Digital Realm untaxed and unregulated. Not just in the American sphere of cyberspace but also in every part of the Digital Realm where there does not exist a National Intranet. There are concerns that the usual array of Sales Taxes or Value-Added Taxes and Income Taxes are ill-suited for the Digital Realm. The proposal as of late has been to come up with new taxes to tap into the US Digital Economy, which on its own is already worth somewhere in the trillions of US Dollars.
The problem is that the Democratic-Republican Party in Congress does not see eye to eye with their counterparts in the State legislatures. The State legislatures know that the US Digital Economy has siphoned a lot of Kapital and Schuld from the US Market Economy and are trying to ensure that there is enough Kapital in their budgets to provide various State services to their residents. The Coronavirus Pandemic has played a significant role in ensuring a large-scale expansion of the US Digital Economy to such an extent that there are now States in the US which are faced with budgetary deficits. To balance their budgets, they need to tax the US Digital Economy.
Unfortunately for them, there are provisions in ITFA which have ceased to be relevant in these times. They may have been sensible in the 1990s, but a lot has changed in the past three decades. The Jeffersonians in Congress have no interest in amending ITFA, let alone repealing and replacing it. Thus, the States have taken it upon themselves to pass the necessary reforms on their own terms, well-aware that their legislation actually violates ITFA. The expectation is that the Supreme Court would intervene by hearing a case about ITFA, side with the States, and agree to reinterpret the constitutionality of ITFA so that the States could go ahead with their policies. It remains to be seen if the Supreme Court will decide to declare ITFA unconstitutional and compel the Jeffersonians in Congress to repeal and replace ITFA.
In summary, we have an unregulated US Digital Economy where trillions of US Dollars are going untaxed, a Congress that does not think that there is a policy issue involving ITFA, States convinced that the Federal government is not doing enough, and a Supreme Court that acts more like a neutral observer.
There is no doubt that Big Tech and pro-Jeffersonian Netizens have vested interests in preventing the States and the Federal government by extension from intervening in the US Digital Economy. The former is no doubt guided by early WWW position from the 1990s that the Digital Realm should be ungovernable and completely divorced from the constitutional and social norms of the Real World. There is way too Kapital at stake for them to just let the State governments intervene in the US Digital Economy. At the same time, there are Netizens who somehow convinced themselves that the concept of “Digital Taxation” would curtail Amendment I, even though the States themselves are adamant that they are simply exercising Amendment X.
Think about that for a moment. Are we looking at a pivotal moment in the State of Total Mobilization where aspects of the Constitution are appearing to be at odds with each other? It is really strange to learn that the arguments both for and against repealing ITFA are centered around two Amendments from the Constitution’s Bill of Rights, namely Amendments I and X.
But recalling what I had written in The Digital Realm, this sort of contradiction makes perfect sense. What I am looking at is a clash of perspectives over whether Personal Privacy and National Sovereignty are supposed to be integral values which must be upheld in the Digital Realm. If we are to argue that such values have any significance whatsoever in the Digital Realm, then we are forced to entertain the concept of the National Intranet because we have realized that the Digital Realm cannot be borderless, formless and lawless.
Even under the Work-Standard, it is absurd to think that any conception of a “American Economy” would be completely controlled by the Federal government. In Hamiltonianism, American economic life reflects our federal system, where the Social Ranks of our Economic Organization are governed by the Federal, State and Municipal governments. There are Enterprises which deserve to be governed by the State and Municipal governments and there are those which must be overseen by the Federal government. The centralization of the Federal government is only a means to an end; it is senseless to make a principle out of centralization, similar to how it is likewise ridiculous to make some principle out of decentralization.
In keeping with my conclusions from The Digital Realm’s “Scenario 1999,” how should we envisage an Americanized conceptualization of the National Intranet for the Federalist American Union? Sure, our Federalist Intranet may be owned and administrated by the Federal government, but the real governance is going to be delineated among the States and Municipal governments. For every State and Municipal government in the Union, there exists a Social Forum for each. There are digital boundaries within the Federalist Intranet that reflect those which exist in America offline. There are Digital Enterprises which fall under the purview of State and Municipal governments, with the Commerce Clause recognizing the presences of Digital Enterprises that must be overseen by the Federal government.
Laws passed by a Municipal government only apply to their section of the Federalist Intranet. Laws passed by a State government only apply to their section of the Federalist Intranet, which is also shared among their subordinate Municipal governments. But laws passed by the Federal government are going to apply to the entirety of the Federalist Intranet. Even in the Digital Realm, the Supreme Court and the Federal and State courts will still have their own roles to play, but they will not be “legislating from the bench” like they are doing under ITFA. At the end of the day, the fundamental questions of National Sovereignty and Personal Privacy remain constant across any number of policies capable of impacting the Digital Realm.
America governs its Digital Economy the same way it governs its National Economy, in accordance with Federalism and the Constitution. We do not need to turn to the National Intranets of the German Reich, the Soviet Union, the People’s Republic of China, Imperial Japan, Cuba, Iran and the DPRK, for inspiration. After all, what works in those countries is not guaranteed to be applicable to America. Why should we turn to them when we should be ourselves, as was intended by the Framers of the Constitution? This notion that we should borrow every little idea from other countries is precisely why the Jeffersonians have been able to assert Liberal Capitalism as “the only All-American ideology” in their thoughts, words, actions and policies.
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