- - Tuesday, August 18, 2015

In 2002, while visiting my home state of Tennessee, President George W. Bush famously blundered the old adage, “Fool me once, shame on you. Fool me twice, shame on me.”

“There’s an old saying in Tennessee, I know it’s in Texas, probably in Tennessee that says, ‘Fool me once, shame on … shame on you. Fool me … You can’t get fooled again!’” he said.

Unless responsible lawmakers step up and stop a group of tax-and-spend Republican senators, led by Tennessee’s Lamar Alexander and Mike Enzi of Wyoming, Americans will be fooled again, despite what President Bush claimed. These self-declared conservatives will trick voters by slapping a tax on the Internet, which would be a shame for everyone.

In 1998, President Bill Clinton signed a widely supported, bipartisan measure that barred state and local governments from taxing Internet access. The Wall Street Journal calls it the “email tax.”

The logic behind the Internet tax moratorium was simple: To drive people and businesses online, the U.S. should do what it can to keep prices down. The Internet was then, and still is today, a rather expensive commodity. By avoiding taxing the Internet, it would be cheaper and available to more people.

Based on the average tax rate of other communication offerings like phones, at 17 percent, or cable, at 12 percent, the savings is quite significant. Grubby pawed local and state governments may not like the anti-tax policy, but consumers certainly do.

Yet the 1998 measure and every iteration of the Internet tax ban since, including the last edition passed in December 2014 as part of the Cromnibus, has been temporary. This one expires on Oct. 1.

Given that the House of Representatives passed Virginia Congressman Bob Goodlatte’s bill – which would make the moratorium permanent – by a voice vote, preserving the tax ban should be simple. But just as we have seen before, a group of senators, including Republicans Mr. Enzi and Mr. Alexander, view the discussion as an opportunity to advance their shady online sales tax scheme – the Marketplace Fairness Act.

Under their bill, which they expressly combined with the ban on access taxes last year, states would be able to tax consumer purchases made online through out-of-state retailers. To help sell their bad idea, a new tax by any definition, Mr. Enzi, Mr. Alexander and their buddies across the aisle misleadingly argue that the measure closes a loophole and keeps taxes off the books. “Tennessee could use this lost sales-tax revenue to continue to avoid imposing a state income tax,” they wrote in 2011. “Wyoming might use the revenue to lower its property-tax rates. Other states might use the lost revenue to reduce tuition at state colleges or to reward outstanding teaching.”

Their logic is faulty. Perhaps that’s why actual conservatives in the Senate oppose it. “The people who get hurt by this bill are the little guy,” Sen. Ted Cruz said in 2013. “Small online retailers who get hammered by this bill. Who face massive new taxes. Who face compliance costs. If you’re a small online retailer you’re suddenly subject to the jurisdiction of over 9,600 taxing jurisdictions all over the country … and the little guys, they don’t have powerful lobbyists here in Washington.”

Indeed, and to exploit the opportunity to permanently ban access taxes as a time to push this wayward legislation is economically irresponsible.

In his first run for president in 1995, Mr. Alexander said he would reform the tax code to “create an environment in which the largest number of new jobs can grow.” The tax code needs reform to be sure, but conflating sales and access taxes should not be part of this process. It would kill jobs by adding costs, rather than creating new ones.

Senate Majority Leader Mitch McConnell should do what his predecessor consistently failed to do: Put his foot down and advance common sense. A permanent ban on Internet access taxes, a measure with 51 co-sponsors in the Upper Chamber, would pass tomorrow if it were brought to the floor. Now is Mr. McConnell’s time to demonstrate leadership and conservative, low-tax values by making the Internet tax ban permanent.

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