As a special Congressionally-mandated committee prepares to meet here tomorrow in a continuing debate on whether to tax the Internet, some fear the panel won't get very far thanks to Presidential politics and a few other factors - like the panel itself being divided already, and at least one key White House hopeful refusing to back a permanent Net tax ban.
Two Republican Presidential contenders support a permanent Net tax ban - Arizona Senator John McCain and Forbes publisher Steve Forbes did so during the recent Republican debates. Texas governor George W. Bush said nothing about it at the time, but he has said previously he favors extending the current Net tax ban another three years. So does Vice President Al Gore, the leader in the Democratic presidential campaign for now. Democratic presidential hopeful Bill Bradley, however, has refused to support a permanent Internet tax ban.
A new poll from Iowa, just a short time before the Jan. 24 caucuses, could make committee debate even more testy, since over 50 percent of Iowa residents questioned said buying over the Internet should not be taxed.
Interest groups who oppose Net taxes have called for political candidates to sign a pledge for a tax moratorium on the Internet, including Americans for Tax Reform and Citizens for a Sound Economy.
The current moratorium expires in 2001. Bush, according to Wired, will not decide where he stands on a permanent Net tax ban until after the special panel led by Virginia Governor James Gilmore - himself an opponent of Net taxes - releases its findings next April.
Last Friday, Forbes hammered Bush on tax policy in general, accusing him of sharing the same values as Gore on the issue. Meanwhile, on Monday, the Orange County Register tomahawked Bradley for his refusal to back a permanent Net tax ban.
"Read Bill Bradley's lips: He might tax your use of the Internet…Bradley is presenting himself as a different voice from the Clinton-Gore administration," the paper thundered in an editorial. "But on Internet taxes he has become all too conventional…Voters should seriously question the candidacy of any politician for any office who refuses to rule out entirely exempting Internet from taxation."
Tomorrow's meeting in San Francisco will be the third gathering for the nineteen-member committee. "Unfortunately, the level of political noise around this issue is heating up substantially with the presidential candidates taking positions," Richard Prem, tax partner with Deloitte & Touche, tells Wired. "I think its a recipe for gridlock."
Other watchers tell the magazine the meeting could break down over threats to call a delegate-by-delegate vote on the Internet sales tax issue. Ernst & Young director of state and local taxes Joseph Crosby tells the magazine "many" think everything's "going to blow up in San Francisco."
One panel member is Grover Norquist, president of Americans for Tax Reform and a longtime conservative activist. Norquist says representatives of President Clinton have been pushing "in support of a coalition of state and local government" fighting to take or keep power to tax Internet sales, Wired says.
"I am going to ask them why," Norquist tells the magazine. "Is that their personal position or are they representing…Gore when they do this?"
