The Gore Tax -- Taxation Without Representation 90s-Style
By Sara McPeak
October 1998
I'm a rural midwesterner, born and raised in the heart of the beef
empire amid federally subsidized cornfields which aggravated my asthma
and sinuses, the Rural Electric Association which electrocuted two of my
small classmates at an early age, and the CCC camp which built a bridge
over dry land -- never mind the river was never diverted beneath. These
were all programs funded by the federal government and the only person I
ever saw benefit from these federal programs was a rich lawyer in our
town who had some swamp land down by the Boyer ("Booyer") River in the
soil bank. Eventually I left that town and became a Republican.
Today, thanks to Al Gore and the Federal Communications Commission, you
and I are being besieged by yet another federal government program
called E-rate. America's schools and rural health care institutions
will supposedly be the beneficiaries of this one, which offers them
Internet access. Well, I have a grandson about to enter school and a
mother in a nursing home, so I have no axe to grind -- I could only
benefit from this if there were really a benefit to be
had. But I am as negative in regard to this one as Al Gore is
positive. In fact, he is so in favor of the E-rate program, that he
refers to it as the Gore Tax.
It's not surprising, considering this administration's credibility gap,
that the first and foremost dispute concerning the E-rate is its
illegitimate conception. It is seen as an Internet commerce tax
secondarily levied on individuals' long distance service and yet it was
born in the Federal Communications Commission, which does not have
the authority to tax.
According to Steve Forbes in an editorial dated August 10, 1998, as
Americans we ought to be disturbed and distraught with this concept of
taxation without representation. Even worse, it is really the long
distance carriers who are secondarily levying this tax on their
customers -- due to the fact that the FCC levied the telephone companies
in order to create the E-rate Fund. For decades the FCC has
administered the Universal Service Fund, ensuring phone service for all
members of the public. With the arrival of Clinton and Gore, Washington
resounded with the call for less government intervention and less
welfare dependence and yet, lo and behold, the administration is backing
a new federal program to be funded by the already overtaxed middle
class. This month's Algor(e)ithm = "the exception proves the rule was
made to be broken."
The administration of this E-rate Fund is also troubling. The FCC
directed the National Exchange Carriers Association to create two
corporations to administer the E-rate Fund. These were the Schools and
Libraries Corporation and the Rural Health Care Corporation. In a
"Statement of John E. Berthoud, Ph.D., President of the National
Taxpayers Union before the U.S. House of Representatives . . . February
26, 1998", Berthoud quotes the General Counsel of the General Accounting
Office as follows:
"The Commission exceeded its authority when it directed the National
Exchange Carriers Association, Inc. (NECA) to create the Schools and
Libraries Corporation and the Rural Health Care Corporation. The
government Corporate Control Act specifies that "[a]n agency may
establish or acquire a corporation to act as an agency only by or under
a law of the United States specifically authorizing the action," 31
U.S.C. 9102.
These entities act as the agents of the Commission and, therefore, could
only be created pursuant to specific statutory authority. Because the
Commission has not been provided such authority, creation of the two
corporations violated the Government Corporation Control Act.
As if the fact that the very existence of these corporations violates a
government act were not enough, the Chief Executive of the Schools and
Libraries Corporation, Ira Fishman (who has since resigned his post amid
the controversy surrounding the legitimacy of E-rate) was a former
fund-raiser for Al Gore, and as Chief Executive of the SLC, Fishman
earned $200,000, more than any federal employee other than the
President. And now, realizing all the concerns surrounding the mere
existence of this E-rate Fund, add to this the outstretched hands of
32,000 institutions which have applied for this funding. Are we to
penalize the middle class taxpayer yet again and filter a few Internet
ties to our children and elderly while lining the pockets of chief
executives who happened to be in the right place at the right time?
Following is Al Gore's defense for the E-rate as reported on the Gore Tax website:
"Incredibly enough, there are those who would destroy the program and
pick the money from the pockets of our poorest schools. I'd like to say
to them, loudly and clearly, that your effort to block the e-rate is an
effort to ration information and ration education and it would darken
the future of some of our brightest students. We will not let you do
it." (quoted in the San Jose Mercury News, February 26, 1998)
Gore's lofty idealism is undermined by his even more obvious duplicity.
This article copyright © 1998 by Sara McPeak, and may
not be reproduced in any form without the express written consent of its
author. All rights reserved.
Algor(e)ithms!