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Today, Empower America praised the House’s action in passing the Internet Non-Discrimination Act by a vote of 352-75, which included an important five-year extension of the moratorium on new, multiple and discriminatory Internet taxes.
Last week, Empower America Co-Director Jack Kemp sent a letter to every member of Congress, in addition to a study on Internet taxes by Empower America staff, recommending that Congress adopt a five-year moratorium on new Internet taxes. The letter also urged the Congress to reject the National Governors Association’s plan to impose new, uniform national sales and use taxes on the Internet.
"House passage of the Internet Non-Discrimination Act is a victory for the new economy," said Jack Kemp. "The Internet has swept in a wave of economic prosperity to America, creating surpluses for the treasuries of federal, state and local governments. Extending the moratorium on new Internet taxes encourages growth and prevents new hastily-devised tax plans that will burden the Internet’s explosive economic progress during its infant stages."
Kemp said his delight at the adoption of the moratorium legislation, however, was dimmed considerably by the last-minute inclusion of a confusing Sense of the Congress Resolution, the so-called Istook Amendment, which makes it appear that Congress actually believes current state sales taxes violate the moratorium. Under the resolution, Congress’ sense of what constitutes a "non-multiple," "non-discriminatory" state tax—and thus its sense of what constitutes a permissible state tax under the moratorium—seems to have been turned on its head. The Istook language appears to strike at all state sales taxes unless they are nationally uniform and coordinated under a multi-state administrative and policy-making apparatus, i.e., the kind of nationally harmonized system of state sales taxes currently being promoted aggressively by state and local governments. Kemp expressed hope and confidence that the Istook language would quickly be swept aside since Congress can’t put its imprimatur on a radical and controversial change in state and federal tax policy that it has not even debated.
Kemp also noted that the Internet tax vote was an important first installment in the House leadership’s eContract 2000. Kemp said, "When it comes to fostering the kinds of intellectual and technological breakthroughs that have brought us the Internet Economy, the eContract 2000 has it exactly right that ‘freedom is the answer, not government intervention." The Internet’s truly ‘empowering’ technology is breaking down barriers to trade, to knowledge, to wealth and to human understanding everywhere you look. The House is to be applauded for choosing the path of freedom in extending the Internet tax moratorium. Empower America supports the objective of eContract 2000 to foster the growth of the Internet economy, and we’re prepared to keep fighting the good fight in the battles ahead."