Politicians Talk Taxes, Technology

House votes to extend Net tax moratorium; Republicans organize high-tech future.

Nicole Maestri, Medill News Service

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The House voted 352 to 75 to extend the moratorium on Internet taxes only after a day of debate. Opposing Democrats voiced concern with the length of the extension, and urged extending the moratorium by only two years. They contend it would protect states and retailers from being hurt by a long-term loss of sales tax.

Meanwhile, Republicans pledged to build a high-tech future by signing the e-Contract 2000. The plan calls for reducing taxes, regulation, and litigation that prevent high-tech growth. Its priorities include promoting free trade and e-commerce, and training a work force for a high-tech future.

"We are the first line of defense against government intrusion," says House Majority Leader Richard Armey (R-Texas). That defense includes shielding the Internet from undue taxation or regulation that might slow its growth.

Many Republicans supporting the "E-Contract" also support continuing the five-year moratorium on "new and discriminatory" taxes on the Internet.

Continuing this moratorium will ensure the Internet has "freedom to grow, expand, and innovate," says Rep. Bob Goodlatte (R-Virginia).

Party Differences

Many Democrats remain at odds with a five-year moratorium on Internet taxes. They say a two-year extension would protect states and retailers from being hurt by a long-term loss of sales tax. Last year alone, states lost an estimated $525 million in tax revenue from online sales, according to Forrester Research.

Despite this difference, the Democrats' own high-tech vision, the "E-genda," shares many of the views echoed by Republicans on Wednesday. It was unveiled last year by the New Democrat Coalition.

Its goals include ensuring a skilled workforce, reducing taxes to encourage investment, and encouraging the growth of e-commerce.

"There's a lot of bipartisan support for many of the components," says Rep. Cal Dooley (D-California), and founder of the New Democratic Coalition.

E-genda 2.0 will be released in mid-June. Before then, Democrats plan to visit Silicon Valley to meet with high-tech companies and learn about issues that affect their businesses.

Dooley says the new E-genda will address many of the same issues as the first E-genda, including a push for digital signatures and the development of online privacy policy.

"We need a comprehensive privacy policy that incorporates some of the issues that are more specific to commerce on the Internet as well as some of the issues that are important to the financial services sector," Dooley says.

More Tech Issues Approach

With only a few months before the congressional year ends in September, both Democrats and Republicans are attempting to pass tech legislation. Both have visions to promote the growth of the Internet, technology, and the economy. Among the issues that may come to a vote:

* an end to the three-cent telephone excise tax

* a permanent ban on taxing Internet access

* digital signature legislation

* increasing by 200,000 the number of H1B visas issued to foreign workers

* extending permanent normal trade relations with China.

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