From Wall Street Journal today you see the damn politicians are still anxious
to get further into our wallets. This rumor has been going around the
internet lists for years and now they are at it again. Those of you who live in
Tennessee need to get on that
dumb Senator( who was not much of a governor) and insist he stop this. All
some of them know is raising taxes more so they can spend it on what they want
to buy votes.
My suggestion to all is to send this around rapidly and all of us call our
Senators and protest vigorously.
Sarah Browder

REVIEW & OUTLOOK
Taxing the Net
April 27, 2004; Page A18

President Bush renewed his call yesterday for a permanent ban on taxing
Internet access, particularly the high-speed phone, cable and satellite varieties
known as broadband. The White House is hoping that the Senate, which is
scheduled to address the issue this week, was paying attention. We hope so, too.

A small pro-tax contingent of Senate Republicans, under pressure from
Governors and state legislatures back home, successfully conspired to allow the
five-year-old moratorium on federal and state Internet access taxes to lapse last
fall. The House has already voted to renew the ban, but usual GOP suspects such
as Tennessee's Lamar Alexander and Ohio's George Voinovich have used
procedural tactics to prevent the Senate from following suit.

States argue that the recent economic downturn necessitates tapping
cyberspace as a brand new cash cow to fund vital public services. But watchdog groups
like the Club for Growth and Americans for Tax Reform are quick to point out
that tax receipts at the state and local level have doubled over the past 12
years. If states are in the red, it's because of their inability to control
spending.


Last year, state tax collections overall increased another 4.5%. According to
Census data, 2003 fourth-quarter receipts jumped 9.3% over the corresponding
period in 2002. That represents the highest such percentage increase in more
than 15 years.

Mr. Bush said yesterday that broadband deployment plays an increasingly
important role in the nation's economy and that advancements in fields like
education and health care depend on it. Yet the U.S. ranks 10th world-wide in
broadband technology and its availability. The President made clear that taxing
access won't improve the situation.

"In order to make sure it gets spread to all corners of the country, it must
be affordable," said Mr. Bush. "We must not tax broadband access. If you want
broadband access throughout society, Congress must ban taxes on access."

Without mentioning their names, the President was speaking to those
Republican Senators and others who have stood in the way of renewing the moratorium.
Mr. Alexander, a former Tennessee Governor playing his federalist card, has gone
so far as to posit that banning such taxes amounts to an "unfunded mandate"
on the states. He and his co-sponsors, Senators Voinovich and Kay Bailey
Hutchison of Texas, have introduced a bill that would clear the way for a Pandora's
box of Internet taxes. Their
goal is to block any federal pre-emption of state and local authority to tax
Internet access and, ultimately, electronic commerce.

This is precisely why we have a Commerce Clause. It was devised to prevent
state and local entities from taxing interstate commerce. The Internet's unique
architecture and decentralized nature lend themselves to the very type of tax
abuse that the Constitution guards against. Under Mr. Alexander's bill, not
only could Internet access still be taxed, but so could all types of Internet
usage. Thousands of localities nationwide would be allowed to levy fees on
electronic correspondence that neither originates nor terminates in their
jurisdiction -- from e-mails to Google searches to J. Crew.com purchases.

As for Mr. Alexander's unfunded mandate charge, this wouldn't be the only
example of Congress restricting state and local taxing authority. Federal law
already pre-empts states and localites from taxing things like airline tickets,
retirement income of nonresidents and certain mobile phone calls. Surely,
electronic commerce belongs on this list.

Where the Internet will take us remains anyone's guess. But we doubt that
allowing the nation's telephone tax and regulatory blob to absorb the digital
economy is the fastest way to get us there. A bill sponsored by Virginia Senator
George Allen and supported by the White House would make permanent the ban on
Internet access taxes.

Senator John McCain has put forth a compromise proposal that's better than
what we have now but doesn't go far enough. Essentially, it would extend the
moratorium for another four years while allowing some broadband (DSL lines in
select states) to be taxed. That's probably unacceptable to the states because it
still pre-empts their authority to tax.(Naturally old McCain who can't make
up his mind which side he is on has to stick his nose in and muddy the waters)

The real problem with anything short of a permanent ban is that it keeps the
issue alive to be debated down the road. That creates uncertainty, which is
the last thing the industry needs. A permanent ban would be more difficult to
resurrect. It would also incentivize a telecom sector that stands ready to
invest billions to upgrade networks and make high-speed Internet access available
to all American homes and small businesses.

To subscribe, change options, or unsubscribe please see the instructions at
http://listlva.lib.va.us/archives/va-roots.html