[Congressional Record Volume 160, Number 154 (Monday, December 15, 2014)]
[Senate]
[Page S6830]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                        Internet Tax Freedom Act

  Now, for a few minutes, Senator Thune and I are going to talk about 
the Internet Tax Freedom Act and our involvement in it. The story about 
the Internet Tax Freedom Act really starts in the 1990s. This was a 
period when I think policymakers were starting to think about how we 
lay out a framework for addressing the various challenges to ensure 
that the Internet would tap its full potential. We wanted to ensure 
that the Internet would tap its full potential for innovation, for 
commerce, for learning, for health care. I want to make it clear, we 
weren't talking about inventing the Internet. What we were talking 
about was laying out a set of policies to ensure it would be possible 
for our country and for persons all around the world to tap the full 
potential of the Net.

  I got my start with the former Congressman from California, Chris 
Cox, when we were looking at the challenge of what would happen if a 
Web site or a blog was held liable for something that was posted on the 
Web. The two of us, much like Senator Thune and I have done over the 
years on the Internet Tax Freedom Act, tried to really unspool all the 
implications. It became very clear back in the 1990s that if a Web site 
or a blog was held liable for something that was posted on the site, 
nobody would ever go out and invest in what we now know to be the 
social media because the last thing they would do is put their money 
into something where they would be hit and hammered with all kinds of 
litigation and lawsuits. Our former colleague Chris Cox and I wrote the 
laws that ensured that a Web site would not be held secondarily liable. 
In fact, at that time, all this was so new that our approach, which 
relied on voluntary filters and the like to deal with smut, and another 
approach that was more of an old-fashioned censorship approach--both--
went to the Supreme Court, and the Supreme Court upheld our approach 
and struck down the other.
  Today, if you talk to many people in the social media, they cite that 
law as really being the key that unleashed modern investment in the 
social media because if you ran a Web site or a blog, you knew you 
wouldn't be held secondarily liable for something you couldn't control. 
I think it is fair to say that Congressman Cox and I, we were 
intoxicated about the fact that we had written this law, upheld by the 
Supreme Court, and we thought about what ought to go next in terms of 
trying to lay out a framework, as I indicated, to tap the full 
potential of the Net. Early on in our discussions, we came across a 
situation with respect to taxing the Internet that was particularly 
troubling. What we found was that if someone bought a subscription to a 
newspaper and they bought the online edition, they got hit with a big 
tax. But if they bought the offline edition--what we call now the 
snail-mail edition--they didn't get taxed. Congressman Cox and I said 
then that this is not going to help promote innovation. That is not 
going to allow the Internet to grow. It is just plain discrimination. 
It is discriminating against the Internet. It is singling the Internet 
out. You have to pay taxes for the online edition of the publication 
but you don't have to pay a tax if you buy the snail-mail edition. We 
wrote the Internet Tax Freedom Act to protect the openness and 
viability of the Net for the platform for commerce speech and the 
exchange of ideas.
  As both Senator Thune and I have seen over our years of working 
together on this, this has become important to the millions of American 
citizens and businesses who depend on the Net. I think it would be fair 
to say--Senator Thune and I discussed this--it is likely the Internet 
would be subject to the same level of punitive taxation that is 
currently inflicted on wireless services without the legislation we 
wrote. Without the Internet Tax Freedom Act, access to information in 
America would no longer be tax-free--access to online communication 
would no longer be tax-free. Access to the global marketplace so 
crucial to America's economic future would no longer be tax-free. The 
cost to consumers could be hundreds of dollar a year per household, 
which certainly is a burden to many working-class families who right 
now are walking on an economic tightrope trying to balance the food 
against the fuel and the fuel against the college costs and all of the 
challenges we know for working-class families in Wisconsin, Oregon, and 
across the country.
  Senator Thune and I have been working together on this issue for a 
number of years. I want to thank him for our partnership over the 
years. Now we have gotten a bit of seniority. We chaired a subcommittee 
on the Finance Committee, and we really see these issues as central to 
economic competitiveness.
  This is what we need to grow and prosper with more good-paying, high-
skill and high-wage jobs for middle-class people. That is why we have 
introduced together legislation that would really set our tax policy in 
this part of the economy into the 21st century. That is the Digital 
Goods and Services Tax Fairness Act. This legislation ensures the 
digital goods will continue to be treated fairly, consistently, and 
predictably across State lines, just as their nondigital competitors. 
Because the Internet Tax Freedom Act has been temporary, Senator Thune 
and I authored new legislation to make the Net tax-free permanently. 
Our bill is cosponsored by more than half of our Senate colleagues.
  Most importantly--and this is why I think we are on the ascent in 
terms of support for our cause--the House passed a permanent bill in 
July putting the ball in the Chamber's court here. This body could take 
up and pass our permanent legislation--the permanent legislation 
Senator Thune and I have authored--on a permanent basis if it chose to 
do so. But because the Congress has become too reliant--we certainly 
have seen this in a number of areas on stop-and-go government--it was 
necessary to once again pass a yearlong extension as part of a larger 
bill. The extension, in my view, is certainly a positive step. But in 
my view, it is clearly time. In fact, it is long overdue to enact a 
permanent law, to guarantee the certainty and predictability to all who 
are seeking to innovate online, to the people in a garage, whether it 
is in Wisconsin, Oregon or anywhere else, and to have some sense of 
what the ground rules are going to be.
  That is what I sought to be a part of in the 1990s. That is why I am 
so grateful for Senator Thune's leadership, because he has been a 
partner in this cause now for many years on the Finance Committee. Our 
view is that a permanent law in this area would be hugely valuable to 
innovation, to the small businesses, and to the people who have a good 
idea, because it would provide them a new measure of certainty and 
predictability when they are looking at what is coming out of 
Washington, DC.
  We have temporary measures, and we have measures that last a few 
weeks. Senator Thune and I want to get away from that.
  I am very hopeful that next year a permanent version of the Internet 
Tax Freedom Act will be enacted. Senator Thune and I are going to 
continue to work together on a bipartisan basis until that is done.
  With that, I yield the floor for my partner from South Dakota and 
thank him for all his leadership.
  The PRESIDING OFFICER. The Senator from South Dakota.