Madam Speaker, I move to suspend the rules and pass the bill (H.R. 3086) to permanently extend the Internet Tax Freedom Act. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and…
Madam Speaker, I move to suspend the rules and pass the bill (H.R. 3086) to permanently extend the Internet Tax Freedom Act.
Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous materials on H.R. 3086, currently under consideration.
Madam Speaker, I yield myself such time as I may consume.
The clock is ticking down on a key law that protects Internet freedom. On November 1, 2014, a temporary moratorium on State taxation of Internet access will expire.
In 1998, Congress temporarily banned State and local governments from newly taxing Internet access or placing multiple or discriminatory taxes on Internet commerce. With minor modifications, this ban was extended three times with enormous bipartisan support. The most recent extension passed in 2007.
If the moratorium is not renewed, the potential tax burden on consumers will be substantial. The average tax rate on communications services in 2007 was 13.5 percent, more than twice the average rate on all other goods and services. To make matters worse, this tax is regressive. Low-income households pay 10 times as much in communications taxes as high-income households as a share of income.
The Permanent Internet Tax Freedom Act converts the moratorium into a permanent ban on which consumers, innovators, and investors can permanently rely by simply striking the 2014
end date. This legislation prevents a surprise tax hike on Americans' critical services this fall. It also maintains unfettered access to one of the most unique gateways to knowledge and engines of self- improvement in all of human history.
This is not an exaggeration. During the 2007 renewal of the moratorium, the Judiciary Committee heard testimony that more than 75 percent of the remarkable productivity growth that increased jobs and income between 1995 and 2007 was due to investments in telecommunications networks technology and the information transported across them.
Everyone in Silicon Valley knows Max Levchin's story. He came to America from the Soviet Union at age 16. His family had $300 in its pocket, and he learned English by watching an old TV set he hauled out of a dumpster and repaired. Ten years later, he sold PayPal, the well known Internet payments platform he cofounded, for $1.5 billion.
That is the greatness of the Internet. It is a liberating technology that is a vast meritocracy. It does not care how you look or where you come from. It offers opportunity to anyone willing to invest time and effort. That is precisely why Congress has worked acidulously for 16 years to keep Internet access tax-free. Now we must act again once and for all.
The Permanent Internet Tax Freedom Act has 228 cosponsors. The Judiciary Committee reported it favorably by a vote of 30-4. Nevertheless, small pockets of resistance remain. They argue that the Internet is no longer a fledgling technology in need of protection. But it is precisely the ubiquity of the Internet that counsels for a permanent extension. It has become an indispensable gateway to scientific, educational, and economic opportunities. It is the platform that turned Max Levchin from an impoverished immigrant into a billionaire. The case for permanent tax-free access to this gateway technology is stronger today than it ever has been.
Opponents also claim that this legislation will lower State revenues. Seven States currently enjoy an exemption from the moratorium. This legislation lets these grandfather clauses expire. But these grandfathered States had no reasonable expectation of maintaining their special status. The original moratorium included a grandfather clause to give States that were then taxing Internet access some time to transition to other sources of revenue. Some discontinued taxing Internet access in support of a national broadband policy. For those that still haven't, it has been 16 years, time enough to change their tax codes. If the revenue grandfathered States now reap is truly essential, it should be straightforward for the State to recoup it through a different form of taxation.
It is important to note that the Permanent Internet Tax Freedom Act does not address the issue of State taxes on remote sales made over the Internet. It merely prevents Internet access taxes and unfair multiple or discriminatory taxes on e-commerce, whether inside the taxing State or without.
I would like to specifically thank Mr. Chabot, Ms. Eshoo, Subcommittee Chairman Bachus, and Subcommittee Ranking Member Cohen for their work on and support of this legislation.
This bipartisan legislation is about giving every American unfettered access to the Internet, which is the modern gateway to the American Dream. I urge all of my colleagues to support it.
I reserve the balance of my time.
Madam Speaker, at this time, it is my pleasure to yield 2 minutes to the gentleman from Ohio (Mr. Chabot), a member of the Judiciary Committee.
Madam Speaker, I want to thank the gentlewoman from California and the gentleman from Ohio (Mr. Chabot) for their leadership on this issue.
Now I would like to yield 1 minute to the gentleman from Indiana (Mr. Bucshon) for his statement and thank him for his leadership on this issue as well.
Madam Speaker, at this time, it is my pleasure to yield 2 minutes to the gentleman from Georgia (Mr. Collins), a member of the Judiciary Committee and a leader on technology issues.
Madam Speaker, I want to thank the gentlewoman from California (Ms. Eshoo) for her leadership on this issue.
Madam Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Farenthold), a member of the Judiciary Committee.
Madam Speaker, at this time, it is my pleasure to yield 1 minute to the gentleman from Texas (Mr. Barton).
First of all, I thank the gentleman for his question, and I and others have been clear that we think these grandfather clauses should expire. When they first were adopted 16 years ago, it was with the intention that they be phased out. Of course, they have had 16 years, and we would like to have them do that.
Madam Speaker, I yield myself an additional 30 seconds.
Our goal is to have a clean, permanent moratorium signed into law as promptly as possible. If the gentleman from Texas can engineer a phaseout consistent with that goal, I am certainly willing to work with him in that objective.
I yield to the gentleman from Texas.
As this measure is considered in the Senate and then in conference between the House and Senate, we would look forward to working with you.
Madam Speaker, it is my pleasure to yield 3 minutes to the gentleman from Utah (Mr. Chaffetz), who has been a steadfast proponent of Internet tax freedom.
Madam Speaker, I yield myself the balance of my time.
Madam Speaker, passing the permanent Internet Tax Freedom Act would increase access all across America for millions of Americans, especially lower-income Americans, increase growth and increase opportunity, increase jobs in this country.
Now is the time to act. A permanent ban on taxation of Internet access is crucial for protecting the future of our digital economy. If the ban on Internet access taxes is not renewed by November 1, the potential tax burden on Americans will be substantial. It is estimated that Internet access tax rates could be more than twice the average rate of all other goods and services. Low-income households could pay ten times as much as high-income households as a share of income.
The last thing that Americans need is another bill on their doorsteps. A tax on Internet access would burden millions of Americans who rely on the Internet to conduct business, communicate, educate, and live.
Over the past 14 years, Congress has extended ban after ban on States taxing Internet access. The measures have been met with enormous bipartisan support. Only five ``no'' votes were cast in the history of these renewals in the House and the Senate.
As price rises, demand falls. If the ban lapses, State telecommunications taxes could take effect, and those rates are already too high. Former White House Chief Economist Austan Goolsbee estimated that a tax that increased the price of Internet access by 1 percent would reduce demand for Internet access by 2.75 percent.
The permanent Internet Tax Freedom Act merely prevents Internet access taxes and unfair multiple and discriminatory taxes on e- commerce. It does not tackle the issue of Internet sales taxes.
Madam Speaker, this is a great issue for the Congress to move forward on in a bipartisan fashion that will help to create jobs and economic growth and foster continued greater access of the Internet. After all, isn't that what we want? We want every American to have opportunity to access this in the most affordable way so that they can have the educational opportunities, the employment opportunities, the recreational opportunities, the social opportunities that are created by the Internet.
I urge my colleagues to support this legislation, and I yield back the balance of my time.