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Paulson and Gutierrez Back Push For Permanent Internet Tax Ban

by Mike Godfrey,, Washington

28 September 2007

US Treasury Secretary Henry M. Paulson and Commerce Secretary Carlos M. Gutierrez have issued a statement calling on the Senate to make permanent the moratorium on Internet access taxes and on multiple or discriminatory taxes on electronic commerce.

Earlier this week, Senators John McCain (R-AZ), Trent Lott (R-MS) and John Sununu (R-NH) announced that they would push for Congress to enact legislation that would make a moratorium on state and local internet tax permanent. The ban is currently set to expire on November 1, 2007.

The Senate Commerce Committee will mark up S. 1453, the Internet Tax Freedom Extension Act of 2007, at the end of this month.

According to the US Department of the Treasury: "The Internet is an innovative force that opens up the vast potential economic and social benefits of electronic commerce. Preventing the taxation of Internet access will help sustain an environment for innovation, ensure that consumers continue to have affordable access to the Internet, especially high-speed Internet, and strengthen the foundations of electronic commerce as a vital and growing part of our economy."

This gives weight to a statement made earlier on in the week by Senator McCain, who has fought to permanently ban multiple or discriminatory state and local taxes on Internet access and e-commerce transactions since 1998.

He observed that: “Excessive taxes dampen innovation and are regressive, hitting the most vulnerable customers the hardest. A tax on Internet services would be especially difficult on the millions of middle income Americans who use the Internet.”

The U.S Department of the Treasury concluded its report by adding: "Congress has an opportunity to demonstrate bipartisan leadership by passing essential legislation before the current moratorium expires on November 1 of this year. We urge the Congress to expedite passage of a permanent extension so that President Bush can sign it into law before the current moratorium expires."

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