The new economy: To hell with hubris

By Damien Cave

By Salon Staff
Published August 22, 2000 7:00PM (EDT)

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Thank you for one of the few really insightful articles on the dot-com revolution that I've had the privilege to read. I agree completely: These companies are getting way too many free lunches. Expect the backlash to continue unabated; a future class-action lawsuit is not out of the question.

Tom Tomorrow wrote a terrific cartoon illustrating the folly of Net investors' mentality, comparing it to Tulipmania. Eventually, and inevitably, the biggest e-business owners will lose their shirts, and only the ones who actually know how to do business and make money will survive -- just like in any other industry. But the investors won't stop throwing good money after bad because they just don't want the party to end. Don't forget, too, that HUGE WADS OF CASH have a way of making people do dumb things ... how else could lotteries have survived for so long?

-- Darrell Wong

That bill [that would keep the Net tax-free until 2006] isn't the reason states can't levy sales taxes on Internet-related revenues, the Constitution is. Internet companies are not required to charge sales tax for the same reason that catalog companies are not required to: because the Supreme Court ruled in 1967 that requiring an out-of-state firm to collect sales tax for another state interfered with the interstate commerce clause.

And just a note to everyone who feels this revenue loss is horribly damaging to their home state: Virtually every state that charges income tax also charges a use tax, which requires citizens to add up out-of-state purchases and remit the sales tax to their local state government. If you really feel that bad about it, then pay up.

-- Margaret Kane

Salon Staff

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