Eshoo acts to protect the Internet 

U.S. Rep. Anna Eshoo, D-Palo Alto, has introduced the House version of the Permanent Internet Tax Freedom Act of 2007, which would permanently extend the expiring 1998 ban on Internet connection taxes and on multiple state and local taxes of online sales.

As the congressional representative for most of Silicon Valley, Eshoo should be expected to fully comprehend the public benefits of promoting the Internet economy. But she still deserves our commendation for advancing this important legislation to ensure that Internet commerce is never taxed more than other sales.

The Internet is America’s least taxed and least regulated industry. As such, it has become a textbook example of how tax exemptions and regulatory simplification can help emerging industries create more widespread jobs, opportunities and wealth.

It is indisputable that with the aid of unfettered competition, the Internet and associated computer technologies are spearheadingone of the longest sustained growth periods in our history.

Removing the already twice-renewed tax ban would cost consumers upwards of 17 percent more for Internet access, while businesses could be hammered with multiple taxes by 30,000 different cities, counties and state agencies, according to Sen. Ron Wyden, D-Ore., who introduced the Senate’s Internet Tax Freedom Act with co-sponsorship from Republican Sens. John McCain and John Sununu.

In 1998, when Congress passed the first Internet tax moratorium, only one-third of American adults reported using the Internet. But, by 2006, a Pew Internet & American Life Project poll found that nearly three-fourths of those surveyed were Internet users. And 2006 online retail sales exceeded $100 billion, increasing 24 percent above 2005.

"Americans across the country utilize the Internet for communication, commerce, business, education and research," Eshoo said. "Because of the tremendous value it brings to all aspects of our lives, we need to do everything we can to ensure universal access and promote the growth of online commerce. Congressional policy has been a resounding success, fostering growth in productivity and innovation, and widening public access to information."

Eshoo warned that despite the nation’s spectacular expansion of Internet use, "there is still much work to be done." Americans in rural and lower-income areas are lagging behind in opportunities to reap online usage benefits. And since 2001, the U.S. actually dropped worldwide from fourth to 16th place in fast broadband online coverage. Minimizing Internet log-on costs by prohibiting unnecessary access taxes will help America catch up.

The Bay Area, probably the world’s most important center for leading-edge Internet development, stands to gain more than just about anywhere else from Rep. Eshoo’s push to permanently ban a variety of Internet taxes. The Internet Tax Freedom Act has been one of most successful economic policies enacted by Congress in our time and it should be made permanent.

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A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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