- The Washington Times - Wednesday, October 3, 2007

ANALYSIS/OPINION:

Time is running out for the Internet taxation moratorium. The current ban expires Nov. 1, after which states and municipalities can swarm Internet users with new e-commerce levies (and they will). There is even talk of taxing individual e-mail messages. Congress should extend the ban.

This widely popular legislation has been extended twice over nine years and has enjoyed wide bipartisan support. It flew through the Senate by a 93-3 margin when it was renewed in 2004. Everyone from Sen. Chuck Schumer, New York Democrat, to bill sponsor George Allen, Virginia Republican, supported it. In the House, its 134 cosponsors included figures across the spectrum, from Rep. Marty Meehan, Massachusetts Democrat, to Rep. Tom Tancredo, Colorado Republican. The merits of the moratorium have not changed much.

So why the delay? The short answers are dueling legislators and the accompanying congressional foot-dragging. Groups such as the U.S. Conference of Mayors and the National Governors Association want a short extension; grandfathered privileges for the nine states that tax e-commerce; and a narrowing of definitions. Last week, Rep. John Conyers, Michigan Democrat, introduced a bill containing those and extending the moratorium through 2011. This follows Mr. Conyers’ apparent rejection of a bill by Rep. Anna Eshoo, the California Democrat who represents Silicon Valley, and Rep. Bob Goodlatte, Virginia Republican, to make the ban permanent. (We prefer a permanent ban.)

A ban expiry would be a serious disservice to consumers, not to mention a drag on a high-performing sector of the economy. Some on the left are swayed by the argument that the Internet tax moratorium places a disproportionate tax burden on low-income Americans because it is the wealthy and middle class, not the poor, who spend online. This is more than a bit of tax-and-spend revenue hunger. The disparity is likely to lessen in the future, as the costs of computers and online access continue to fall.

There is no compelling reason for this commonsense legislation to expire, other than to fill the grubby hands of state and local politicians. On behalf of consumers, businesses and for economic prosperity generally, Congress should renew the moratorium on Internet taxes.

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