Statement of U.S. Senator Lamar Alexander during Internet Tax Moratorium News Conference

Statement of U.S. Senator Lamar Alexander during Internet Tax Moratorium News Conference

There are two issues for us today:

The first is whether Congress should give a multi-billion dollar tax break to the telecommunications industry - not just Internet access, but to those businesses that support Internet access, and to the telecommunications industry generally for the services that it will ultimately deliver over Internet access.

That's the first question. And I for one don't see any need for us to permanently protect an industry in that way.

The second question, which is for me the bigger question, is whether Congress should give a big tax break to the telecommunications industry, and then send the bill for it to the states, to the mayors and the local governments. Having been governor, as many people here have, nothing makes us madder than for congressmen and senators to come to Washington and claim credit for some action and then send the bill to local government.

The Republican revolution in 1994 that elected a Republican Congress - the heart of that was to end unfunded federal mandates. Then-Gov. Voinovich of Ohio was the leader of the governors in that area, and I am glad he is a United States Senator.

In Tennessee, the proposal that came over from the House could cost our state up to $360 million a year, by the end of three years. That may not seem like much money in Washington D.C., but it's about 3.6 percent of our state budget at a time when the governor has asked most of his departments to make a 5 percent cut - to put it in Washington terms, 3.6 percent of the budget would be $82 billion of the federal budget, and we print money, they have to balance budgets. I think it is the height of legislative arrogance for us to pass a mandate and send them the bill.

That's what the objection is.

There is some news today that there may be a several month extension of the current ban on Internet access tax. For me that would be welcome news. This train was racing down the track. If there was a temporary extension of the current ban, that would give us time to pull the train into the station, get on board, look it over and find out where it is going.

Then I believe if the Senate and the rest of Congress does that, it will be amended, maybe as we proposed, or it won't pass at all. Because the more senators have taken a look at this proposal, the less they have liked it.

This is really a supreme political trick. If this were to succeed, the next crop of candidates for the United States Senate would run on the platform for abolishing the state income tax, and then they'd run on the platform for abolishing the state sales tax, and then they'd run on the platform for abolishing the local property tax. Now somebody might say then, well then why don't you run for governor? Why don't you run for mayor? See that's what this discussion is.

This is not about the Internet, it's not about taxes. It's about governors, and mayors, and legislators who can make their own decisions about what services to provide and what taxes to raise. And they'll either layoff firefighters, layoff teachers, raise - in Tennessee - the tax on food, medicine, water or income, if we come up here and tell them what they can't do. In the heart of the Republican revolution in 1994 and 1995, it was 'no money, no mandates,' and 300 Republicans stood on the U.S. Capitol steps and said, 'If we break our promise, throw us out.'

There was a great anger in this country at arrogant politicians who would come to Washington and impose mandates without money, and that is what this is about. We're not here to tell Pennsylvania, or Kentucky or any other state or community what to tax or what service to provide. We're simply here to say we remember the 10th Amendment to the Constitution says that powers are reserved to the states unless they are explicitly given to the federal government. You decide what services to provide. You decide what taxes to raise, and if we want to give a big tax break to the telecommunications industry then we should pay for it, we shouldn't ship you the bill.