Pentagon contracts are in need of Senate oversight

We applaud the eight senators who are pressing the Pentagon to investigate whether the Air Force refueling tanker contract is irreparably biased toward France-based Airbus and against U.S-based Boeing (“Senators want proof that ‘clerical error’ hasn’t hurt Boeing bid,” Jan. 28).

It seems that only congressional intervention will prevent the Pentagon from bending over backward to award the $35 billion contract to Airbus — thereby sending 50,000 jobs overseas to build a plane that experts think doesn’t meet our military needs.

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The senators are concerned that the Air Force showed Airbus proprietary information about Boeing’s capabilities. But even worse, the Pentagon is ignoring the World Trade Organization ruling that Airbus received billions in illegal subsidies from European governments, including $5 billion to build the airframe it is using in the tanker bid. Meanwhile, the WTO has ruled that Boeing’s 767 — the basis of its tanker — was not subsidized. 

The U.S. Trade Representative and members of Congress from both parties have condemned the illegal subsidies, yet the Pentagon is set to award one of the largest and most important defense contracts in a generation to this European trade cheat.

The Pentagon plans to award the contract within weeks. Congress needs to ensure that fair play wins the day.

Washington, DC



Another tax increase is looming on the Internet

From Steve Pociask, President,
The American Consumer Institute Center for Citizen Research

While the two-year tax extension passed by lawmakers should help the struggling economy, most consumers are completely unaware that another tax increase could soon be threatening their pocketbooks. This time, however, it is not the threat of income, estate or capital gains taxes; it is taxes on the purchase of online goods and services — including downloaded digital goods.

Today, there are more than 300 million cellular and wireless broadband subscribers, 81 million fixed broadband subscribers, and millions more who have access to online goods through dial-up Internet access or electronic devices, such as iPods, iPads, Nooks and Kindles. Besides the buying of physical goods and services — gifts and gadgets — from eBay, big-box stores and other e-retailers, these consumers use their digital access to download games, software, books and periodicals, Web applications, ringtones, pictures and videos from servers stored in “the cloud.”

All of this e-commerce has not gone unnoticed by state and local officials looking for a new source of taxation. However, taxation of online shoppers could go far beyond putting online shopping websites on par with brick-and-mortar retailers. The tax increases could get out of hand for one major reason — because it is not always clear who has the jurisdiction to tax, several states might try to tax the same digital transaction, leading to multiple and discriminatory taxes.

Imagine a Nebraska resident who decides to download a wireless app for her phone while waiting for a flight out of Newark airport in New Jersey. If there is a tax to be paid, who has jurisdiction to levy the tax? Would it be imposed based on the buyer’s current location, the buyer’s home state, the state where the seller’s server has stored the app, the seller’s home state, or the location of the Internet service provider? It’s not clear, but what is clear is that this ambiguity will not stop states from trying to collect taxes on downloaded goods and services. 

And, it is beginning to happen now. The major risk is that consumers may soon be facing discriminatory, multiple and pyramid taxes imposed by different jurisdictions for the same transaction. That could be enough to the end the surge of online spending and chill economic growth in this sector.

Last June, the Digital Goods and Services Tax Fairness Act of 2010 (H.R. 5649) was introduced to establish a national framework for settling jurisdictional tax issues on digital goods and services, thereby preventing multiple and discriminatory taxes. As Congress gets to work this year, it needs to address this important consumer issue. As policymakers contemplate encouraging broadband deployment and consumer adoption of new technologies, they should be careful not to tax the very things they wish to encourage.

Washington, DC


U.S. must make a stand for rights in Egypt

From Charity Moschopoulos

What started out as peaceful demonstrations of a dissatisfaction with 30 years of repressive government has turned a bad corner. We need to support and encourage the peaceful elements in the Egyptian society and demand that Mubarak and his thugs resign. It is my belief that only in this way can the country remain stable and continue its rightful place in the Arab and North African spheres of influence. As a person of faith I stand with non-violence and peaceful resistance.

In order to achieve a peaceful and productive future the violence MUST stop. The U.S. must cease its aid to Egypt until and when the current government steps down and is replaced by leaders who can lead the Egyptian peoples into a true democratic state.

To do this, the U.S. needs to demonstrate a real commitment to democracy in Egypt. Our government must work constructively with any and all parties who have the support of the Egyptian people — religious or secular, liberal or conservative. This will make clear that we support true democracy and are willing to align our deeds with our words.

Washington, DC


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