Taxes on Internet access... would
only drive the price of those services beyond the ability of the
Internet have-nots to purchase such service.
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Accessing
the Internet
By
Senator George Allen
The
Senate will soon vote on The Internet Tax Nondiscrimination Act
(S. 150), my bill that permanently prohibits taxes on a consumer's
ability to access the Internet. This law should and must pass to
advance Internet access and digital opportunity for all people in
the United States.
In
less than one decade, the personal computer and the Internet have
truly transformed our nation into the Information Society of the
21st Century, a society in which knowledge and information are synonymous
with opportunity, prosperity and better quality of life. The Internet
has personally empowered millions of Americans as consumers, entrepreneurs
and citizens in our democracy.
More
Americans are empowered by the Internet principally because the
United States has consciously allowed Internet innovators, entrepreneurs
and consumers to be free from onerous tax and regulatory burdens.
Our national pro-Internet policy has been anchored at the federal
level by a five-year moratorium against regressive taxes on Internet
access. Such taxes would drive up the cost of access for consumers
and their families and would raise regulatory burdens and barriers
to innovation for Internet Service Providers (ISPs), software developers
and online commerce.
Congress
first enacted the tax moratorium with the Internet Tax Freedom Act
of 1998, after dozens of State and local governments, eager to tap
the economic potential of the Internet, began to impose disparate
tax theories, rates and regulations on ISPs and consumers. Nobody
saw a panoply of State, local or even federal taxes and compliance
regulations on the Internet as constructive. Quite the contrary,
an evolving labyrinth of tax and regulatory burdens was deemed anti-growth
because it would strangle the new technologies, discourage innovation
and stifle outgrowth of the Internet to more Americans.
Unfortunately,
the current moratorium on Internet access taxes as well as multiple
and discriminatory taxes, is temporary. First enacted for three
years, the moratorium was extended for two additional years in 2001.
Now, the federal moratorium that has been responsible for such dramatic
growth of the Internet and the extension of Internet access to more
than 127 million citizens (approximately 45 percent of our country's
population) is scheduled to expire at the end of this month.
Long-term
tax freedom for the Internet is necessary if America is going to
achieve its well-established goal over the next decade of empowering
all citizens with access to the Internet in this information society.
Over the last two years, some local commissars astonishingly took
the position that high-speed Internet access technologies could
be taxed notwithstanding the federal moratorium because, they reasoned,
digital subscriber line (DSL) service was a taxable service like
telephone service. My legislation updates and clarifies the original
Internet Tax Freedom Act to ensure that all Internet access
whether in the form of dial-up, DSL, cable modem, satellite, wireless,
or any other technology platform used to access the Internet
is covered by the Internet tax moratorium and therefore exempt from
state and local taxation.
Failure
to pass the Internet Tax Nondiscrimination Act (S. 150) would leave
DSL service and other high-speed access technologies open to taxation.
In many states and localities, taxes on Internet access can go as
high as 25 percent, raising the cost of a high-speed DSL line as
much as $10 to $15 each month, or $120 to $165 per year just to
have access to the Internet in a family's home. Such taxes would
raise the cost of Internet access and discourage average Americans
on tight budgets from joining the online world. Such tax burdens
also would inhibit full rollout of competitive Internet access,
including high-speed access technologies like DSL, to all parts
of the country.
While
we can be very proud of getting nearly half of the American people
logged on to the information superhighway over the last decade,
we cannot stop there. Our national goal must be to extend Internet
access and digital opportunity to all citizens. According to the
Pew Internet and American Life Project, Hispanics and African-Americans
represent the fastest-growing segments of the online population.
Measured in terms of income, Internet use is growing fastest in
households making less than $50,000 per year. For the roughly 49
percent of Americans who still are not online, keeping access affordable
and that means keeping access free of taxes is imperative.
Taxes
on Internet access, especially on high-speed technologies, would
only drive the price of those services beyond the ability of the
Internet have-nots to purchase such service. That is why it is so
important for the Senate to pass my S. 150 to make the federal prohibition
against taxes on Internet access permanent before the current
moratorium lapses and America's great strides in expanding Internet
access are lost.
In
a society indeed a world where quality of life and
economic power are directly proportionate to one's access to knowledge,
we must close the economic digital divide, rather than exacerbate
it with state and local taxes. Enactment of the Internet Tax Nondiscrimination
Act will be vital in achieving that goal.
U.S.
Senator George Allen (R-VA) is the author of the Internet Tax Nondiscrimination
Act (S. 150) and Chairman of the National Republican Senatorial
Committee. This article originally appeared in the October 24 edition
of The Washington
Times.
[Posted
October 31, 2003]
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