[Congressional Record Volume 160, Number 154 (Monday, December 15, 2014)]
[Senate]
[Pages S6831-S6832]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                        Internet Tax Freedom Act

  I wish to say to my colleague from Oregon--he mentioned earlier that 
he was the pioneer on this issue, going back to 1998 when he worked 
with former Congressman Chris Cox. That was the original Internet Tax 
Freedom Act. I am hopeful that both our permanent bill, which Senator 
Wyden mentioned, the ITFA bill, and our Digital Goods and Services Tax 
Fairness Act can be considered as early as possible in the next 
Congress.
  The Senator from Oregon, Senator Wyden, is the chairman of the Senate 
Finance Committee--a very powerful committee here in the Congress--and 
will continue his leadership in the next session of Congress as the 
ranking Democrat on that committee. He will be a very influential voice 
on all of these issues--tax matters, trade matters, health care 
matters. The Finance Committee has a very broad jurisdiction. It is 
really important that we get this part right.
  If you look at what most Americans have dealt with when it comes to 
Internet service, they have not been taxed on Internet access for 16 
years due to the Internet Tax Freedom Act moratorium that Senator Wyden 
and Senator Cox were able to get instituted back in 1998. That 
moratorium has been extended three times. It has been critical to the 
rapid growth of the Internet. All of this would change if we allowed 
the Internet Tax Freedom Act to expire.
  We were able to get through the end of this next fiscal year--which 
will be September 30 of next year--an extension of the moratorium. But 
the fact of the matter is, as Senator Wyden mentioned, we need 
permanency with regard to this tax policy. We need certainty. We need 
predictability. We need people in this country to know--American 
families to know--they are not going to be hit with substantial taxes 
as a result of the lapse of this particular legislation.
  You look at what it could do to the average American family. The 
average State telecommunications tax rate is roughly 12 percent. 
Imagine a married couple with two children where everyone in the family 
has a phone with a $50 data plan. Currently, the Internet Tax Freedom 
Act prevents taxes on the data plan in States that didn't have these 
taxes prior to the law's enactment, which is a large majority of the 
States. If this law expires, this family of four would be likely to see 
at least a $20 increase in their monthly phone bill, meaning a tax 
increase of more than $200 a year. For families struggling to make ends 
meet, as Senator Wyden pointed out, this is real money.
  This tax increase would not just be bad for American families and 
American consumers, it would also be bad for American economic 
competitiveness because we know that higher costs for the deployment of 
high-speed Internet will mean a slower rollout of this technology.
  This is especially the case in rural America, where the cost of 
exploring high-speed Internet is often higher than urban or suburban 
areas. By keeping the cost of Internet access as low as possible, we 
help to encourage the continued use of the Internet as a source of 
economic growth, creativity, and entrepreneurship.
  As the incoming chairman of the Senate commerce committee, I am 
committed to increasing Internet connectivity in this country. Whether 
it is through the Universal Service Fund, by getting additional 
spectrum into the hands of the private sector, or by providing 
regulatory certainty to encourage broadband buildout, our committee is 
going to be looking at all available options to make sure more 
Americans have access to high-quality Internet.
  Unfortunately, if the Federal Government allows new taxes to be 
levied on Internet access, we risk canceling out our other efforts to 
get more Americans online. This does not make any sense. We all need to 
be rolling in the same direction if our country is going to be 
connected and engaged in this expanding Internet ecosystem.
  Earlier this year the House of Representatives, as Senator Wyden 
pointed out, by voice vote passed a bill to make the Internet Tax 
Freedom Act permanent, which is a very positive step forward. I am 
hopeful that next year we will move on a much longer term extension of 
ITFA as well as other measures that promote the digital economy, such 
as the Digital Goods and Services Tax Fairness Act that I mentioned 
earlier.
  As incoming chairman of the commerce committee and as a member of the 
tax-writing Finance Committee, I am looking forward to a new agenda 
next Congress, one that is optimistic and forward-leaning, an agenda 
that recognizes that the dynamism in our economy today should not be a 
source of concern but, rather, a source of opportunity for jobs, 
growth, and economic freedom. This agenda begins with support for the 
Internet Tax Freedom Act. That is why I am pleased the bill we passed 
Saturday evening extends the Internet Tax Freedom Act through September 
2015 so that we can have a debate next year about how we promote the 
Internet economy with all of its benefits on a much more permanent 
basis.
  I look forward to working with my colleague from Oregon, Senator 
Wyden, and Senators on both sides who I think care deeply about this 
critical issue moving forward early in the next Congress. As the 
Senator from Oregon mentioned, I think half of the Members of the 
Senate are cosponsors of this bill. That suggests to me that obviously 
there is broad, bipartisan support for what we are talking about here.
  I also look forward to working with Senator Wyden on other issues 
that are important to the digital economy. Digital trade is something 
he and I have partnered on in the past as well. As we look at the trade 
agreements that are currently being negotiated--the TPP as well as the 
TTIP trade agreements with Europe--all need to include important 
protections for the digital economy.
  This is one of the areas in our economy where we actually have a 
trade surplus. Because of American ingenuity, know-how, creativity, and 
innovation, we continue to lead the world in this area. We need to make 
sure that we not only are putting in place the important safeguards 
here in this country against taxing these services but also ensuring 
that we have access to other markets around the world where we know 
American know-how and American ingenuity and creativity can lead the 
way.
  I very much look forward in the next Congress to continuing to work 
with my colleague from Oregon on these important matters so that we can 
continue to see middle-income families in this country benefit from the 
gains in productivity that come, hopefully a higher standard of living, 
higher take-home pay, better wages, and better job opportunities that 
come with a robust, vibrant digital economy that enables our broader 
economy to continue to make great gains.
  I thank the Senator from Oregon, Mr. Wyden, for his leadership on 
this issue both past and present. I look forward to working with him as 
we try in the future to make sure that those gains are protected and 
that we move even further in the direction of economic freedom when it 
comes to the Internet.

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