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The Administration supports Senate passage of S. 442, the Internet Tax
Freedom Act. The Administration believes it is important to establish a
temporary moratorium on Internet access taxes and taxes that discriminate
against electronic commerce so that such taxation does not impede this
promising new economic opportunity. The Administration also believes it is
important to establish a Commission that will develop recommendations about
the longer term tax issues involved. The Internet must not become a tax
haven that drains the sales tax and other revenues that our cities and
States need.
The Administration understands an amendment may be offered that would
repeal the Internet Intellectual Infrastructure Fund ("the Fund"). The
Administration opposes the repeal of the Fund, which would undermine the
Next Generation Internet initiative, an investment in research and
development that will lead to new breakthroughs in high speed networks,
networking technology, and Internet applications such as telemedicine and
distance learning. There would not be an Internet or graphical web
browsers without Federal investment in research and development. Repealing
the Internet Intellectual Infrastructure Fund would deprive the American
public of the Fund's investments in revolutionary Internet technologies and
applications and create uncertainty regarding the Federal Government's
commitment to the Next Generation Internet initiative.
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