Heitkamp began with concerns that the bipartisan, 18-year policy of banning Internet access taxes potentially infringed the "sovereign right of States and local governments under the 10th Amendment," an unusual concern from a liberal Democrat who supports national labor, environmental, and health care laws. (It also implies a misunderstanding of the purpose of the commerce clause, which as Cato scholar Roger Pilon often points out was intended to empower Congress to regulate or "make regular" interstate commerce by striking down barriers. Like Internet access taxes.)
Then she got to her real point: holding the successful, wildly popular ban on Internet access taxes hostage to their desire to force the House to authorize Internet sales taxes.
"I believe we too need to address the Internet tax moratorium which expires on November 1," Heitkamp said. "But... we also need to have a discussion in this context of commerce clause responsibility, to give the States the right to decide whether they are, in fact, going to collect State and local taxes and use taxes." (Use tax is the term for a tax owed on out-of-state purchases for which sales tax is not collected.)
While the ban on Internet access taxes enjoys nearly universal support, the idea of facilitating Internet sales tax is widely opposed by the public and is highly controversial in Congress. It is unlikely that issue will be resolved before the November 1 deadline, and therefore bringing it into the discussion is a dangerous game that risks allowing the ban on access taxes to expire. That would be a disaster.
The liberal Center of Budget and Policy Priorities has estimated the impact of allowing states and localities to tax Internet access as a $7 billion tax hike, assuming states and localities tax Internet access like other services.
But Katie McAuliffe of Americans for Tax Reform warns that the tax bite could be much bigger: "The average sales tax rate on voice services is 17 percent, and 12 percent on video services, while the average general sales tax rate is 7 percent."
Higher bills mean many Americans, including children, could lose access to the Internet entirely. As Goodlatte observed on the House floor, former White House Chief Economist Austan Goolsbee has calculated that even a 1 percent tax on Internet access would reduce demand 2.75 percent.
The Internet Tax Freedom Act has never been controversial before and shouldn't be controversial now. Senate Democrats need to stop playing games and approve the House bill immediately when they return from their summer vacation.
Phil Kerpen is president of American Commitment, a columnist on Fox News Opinion, chairman of the Internet Freedom Coalition, and author of the 2011 book Democracy Denied.
American Commitment is dedicated to restoring and protecting America’s core commitment to free markets, economic growth, Constitutionally-limited government, property rights, and individual freedom.
Washingtonian magazine named Mr. Kerpen to their "Guest List" in 2008 and The Hill newspaper named Mr. Kerpen a "Top Grassroots Lobbyist" in 2011.
Mr. Kerpen's op-eds have run in newspapers across the country and he is a frequent radio and television commentator on economic growth issues.
Prior to joining American Commitment, Mr. Kerpen served as vice president for policy at Americans for Prosperity. Mr. Kerpen has also previously worked as an analyst and researcher for the Free Enterprise Fund, the Club for Growth, and the Cato Institute.
A native of Brooklyn, N.Y., Mr. Kerpen currently resides in Washington, D.C. with his wife Joanna and their daughter Lilly.