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From the Executive Director
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from NewsLink, Vol. 4, No. 2, Winter 2000
Have you seen the commercials featuring GM's new OnStar technology? Imagine you are driving across country and want to stop and eat in a nearby town. You query the web graphical user interface on your dashboard and get the location and menu for the nearest restaurant.
There is a story going around that GM consultants tried to convince top management that this amazing new technology was potentially worth more than GM itself. They urged GM to spin off OnStar and give away the cars. Apocryphal? Sure. But people also laughed at the idea of free PCs, free Internet access and free e-mail.
The New Economy is exciting to behold. But there are still some loose ends: For example, should Massachusetts collect sales taxes on Internet sales? There is an “infant-industry” argument for making e-commerce a tax-free zone, and Congress has imposed a three-year moratorium on Internet taxes. But some people argue that brick-and-mortar retailers should not have to pay sales taxes that their Internet rivals escape. Stay tuned. We're looking at this one.
Then there's the Microsoft case. Last fall, Judge Thomas Penfield Jackson issued a “finding of fact” against Microsoft in the government's antitrust case. But there's no proof that Microsoft ever did anything to hurt consumers. And new technology and corporate acquisitions have obviated much of the government's original complaint. Is there any role left for antitrust in the New Economy?
Finally, there is the question of what the New Economy means to Massachusetts. Massachusetts derives its competitive advantage largely from high-tech industries of the kind that are driving this economy. But, just as e-commerce can bypass brick-and-mortar retailers, it can bypass the established Silicon Valley and Route. 128 high-tech zones. In the months to come, we'll be talking about how the Internet makes firms increasingly footloose and thus sensitive to the state regulatory and tax environment.
The State of the Church
And one more question. As the chart below shows, religion far outstrips every other category of charitable giving. Is this because people would rather give to religious than to other secular causes? Or is it because people are disinclined to support services (education, environmental protection, human services) already provided by government? We'll look at this in future months, especially as it relates to a ballot initiative that would permit state taxpayers to deduct charitable contributions.
NewsLink is the quarterly newsletter of the Beacon Hill Institute for Public Policy Research at Suffolk University.
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