This is the Cato Daily podcast for Friday, September 10th, 2021. I'm Caleb Brown. Various states are looking at adopting digital taxes specifically on advertising. So how does it work? Maryland is currently trying to figure that out. Joe Bishop Henschman is vice president of policy and litigation at the National Taxpayers Union Foundation.

We spoke last week.

You know, the line from The Simpsons I hear remember Mayor Quimby saying when a film production team was leaving town on the way out, he said, oh, and there's also a $1,000 leaving town tax.

Right.

And it seems that authorities, wherever they might be, local governments, state governments,

would like to collect as much revenue for anything that's just passing through.

This started in Europe where obviously a lot of these tech companies are American companies,

earning lots of profits being very successful.

And the European companies don't really have that.

And we talk about why that is, why Silicon Valley is in America and not in Europe.

But they were very jealous of it.

So they started passing these taxes to collect revenue from these companies over and above the corporate income tax because the corporate income tax wasn't reaching them because these companies are not based in Europe.

They're not earning their profits in Europe.

They're earning their profits all over the world.

So they started passing them.

And, you know, France was one of the early ones and a whole bunch of European countries adopted them. And now it's the subject of international negotiations that are ongoing right now on whether those are going to continue or not.

But states started looking at it and saying,

hey, we want in on this. And Maryland was the first one to pass one of these digital advertising

taxes. So if you are a nationwide digital company and you sell, or excuse me, you advertise in

Maryland, you owe this tax.

Okay.

So I don't know.

...