Comprehensive Immigration Reform Act Of 2007

Floor Speech

COMPREHENSIVE IMMIGRATION REFORM ACT OF 2007 -- (Senate - May 23, 2007)

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Mr. ALEXANDER. Mr. President, today, Senator Carper and I introduced the Internet Tax Freedom Extension Act of 2007. Other cosponsors were Senators Feinstein, Voinovich, and Enzi. All of those Senators have been interested in this subject for the last few years.

The bill would, very simply, extend a moratorium on Internet access taxes by State and local governments for another 4 years. This is a commonsense compromise of what can sometimes be a very complicated discussion about continuing the moratorium, without blowing a hole in the budgets of State and local governments.

We all want to be careful about so-called unfunded Federal mandates. We want to respect State and local governments. But at the same time we want to create an environment that encourages technology. We believe this would do that.

The background of all this is, briefly, that originally Congress passed the Internet Tax Freedom Act in 1998, which did an extraordinary thing. It said State and local governments could not tax Internet access for three years. That sounds like a good thing, but we could just as easily pass a bill we might call the food tax freedom act, because that would keep State and local governments from taxing food; or because we are against income taxes, we might say the income tax freedom act and ban Tennessee from having an income tax; or we might say the sales tax freedom act, or the property tax freedom act, or the telecommunications tax freedom act. But instead we created the Internet Tax Freedom Act, meaning, in effect, that States could not tax Internet access. The rationale was that the Internet and electronic commerce is a fledgling industry, and Congress extended that in 2001.

In 2004, after extensive debate, we worked out a compromise extending this moratorium over the next 4 years.

The compromise we worked out in 2004, according to the National Governors Association, may have saved State and local governments up to $12 billion in revenue. All of us want to keep taxes low, but here is where I am coming from. When I was Governor, nothing made me angrier than for Members of Congress coming up with a big idea to pass a law, take credit for it, and send the bill to the Governors, legislators, mayors, and county commissions. That is what we will do if we are not careful about the Internet access tax because, as we saw 4 years ago, telephone calls moved to the Internet. If we banned taxes on telecommunications as part of Internet access, telephone calls over the Internet would be free from taxation.

That sounds good, except States might have to increase college tuition, increase sales tax on food, or some States might have to put in, for the first time, a State income tax.

Mr. President, $12 billion in revenue is a lot of money. The definition of Internet access that is in this new compromise that Senator Carper and I introduced on the moratorium would, for the next 4 years, protect State and local governments, while continuing the moratorium on Internet access. It is sensible. I think we will debate it more over time. Maybe it will even be accepted by all parties. I wanted to signal on my behalf, Senator Carper's behalf, and on behalf of the National Governors Association, the National Conference of Mayors, and the National Association of Counties, that we believe it is very important to do no harm to State and local government. If we want to give a tax break to the telecommunications companies or to Internet companies, then we in Congress should pay for that and not send a bill to State and local governments.

This avoids our having to do that because the moratorium carefully defines Internet access to mean States are free to continue to make their own decisions. This doesn't mean States should attempt to tax the Internet; it means States may, if they choose, impose a sales tax on Internet services, just as States may impose a tax on food, or on medicine, or on gasoline, or may impose a tax on income. That is the job of State and local government. That is not the job of the Congress.

I am glad to join with Senators Carper, Feinstein, Voinovich, and Enzi in introducing the Internet Tax Freedom Extension Act of 2007. I am glad to extend a commonsense moratorium on State and local taxation of Internet access, and I look forward to passage of that legislation before long.

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