Making Emergency Supplemental Appropriations for the Fiscal Year Ending September 30, 2014

Floor Speech

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Mr. WYDEN. Mr. President, the Internet has been possibly the most significant force driving our economy over the past 16 years. It is clearly this century's shipping lane and history's most powerful communications tool. Part of the reason the Internet has revolutionized American life is that it has been protected from discriminatory taxation, thanks to the Internet Tax Freedom Act, first enacted 16 years ago.

This law, as we might expect, is extraordinarily popular among the American people, and it has obviously been of enormous importance to the millions of families and businesses that use the Internet each day.

However, in a few short months the Internet Tax Freedom Act is set to expire. If it does, millions of American Internet users could face multiple and discriminatory taxes from thousands of state and local tax collectors around the country. That cannot be allowed to happen. Congress needs to come together on a bipartisan basis and say clearly: Don't hit the Internet with discriminatory taxation.

Sixteen years ago I was the author of the Internet Tax Freedom Act, along with our former Republican colleague, Congressman Chris Cox. Along with our colleague from South Dakota, Senator Thune, and 52 bipartisan cosponsors, I am the author of the pending bill that would make that protection permanent. I believe if we were able to hold a vote on our bill today, it would pass with overwhelming support. Unfortunately, that is not a political reality. Yet the clock keeps ticking toward expiration.

Protecting the Internet and every Internet user in our country ought to be a matter that takes precedence over politics and partisanship. The Senate can move this short-term extension today while the Senate works on a bipartisan basis to deal with the issues raised by those who believe that allowing localities to collect taxes across the country is more important than a ban on discriminatory taxation.

I hope the Senate will join me in supporting the temporary extension of the Internet Tax Freedom Act as a bridge to permanent legislation.

To reflect very briefly for a minute, we thought this law would work well 16 years ago. To describe what triggered my interest, 16 years ago, when I was a young Member of this body and I had a full head of hair and rugged good looks, we would hear for example about how if someone bought the newspaper--the online edition of the paper--they would face a stiff tax in some jurisdictions, but if they bought the snail mail edition they wouldn't face the tax. Democrats and Republicans coming together said that is discriminatory. That is discriminating against technology, against the future, against the promise of the Internet.

We thought this proposal would work well. It is quite clear. We just have to make sure what we do online is not more burdensome and an endeavor that involves more taxes than what we do offline. That is what the bill has been all about. So we thought it would be promising, but it has far exceeded our expectations in terms of what it has done to promote innovation and for small businesses and others who don't have political action committees and don't have big lobbies advocating for them. Ensuring they are not hammered by multiple and discriminatory taxes by thousands of localities has been a lifeline in terms of their being successful.

I could take more time this morning. We have colleagues and of course many matters still to deal with before we leave. I hope that given this history, which has been a bipartisan history--I so enjoyed working with our former colleague Chris Cox on this legislation 16 years ago. My take is that the overwhelming number of Senators would like to permanently reauthorize this ban on multiple and discriminatory taxes on the Internet today, and that is what Senator Thune and I have sought to do in our legislation, which has more than half of the Senate cosponsoring it. That is not possible today. But what is possible is that we act now so we don't bump up against that deadline that if reached our small businesses are subject--we have more than 5,000 taxing jurisdictions, and if even a small number of them were to inflict discriminatory taxes on Internet commerce, that would be a big blow in a fragile economy.

So for purposes of the temporary extension of the Internet Tax Freedom Act as a bridge to permanent legislation, let us say loudly and clearly that we as a body--we as the U.S. Senate--are not going to hammer the Internet with multiple and discriminatory taxes.

I yield the floor. I note the absence of a quorum.

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Mr. WYDEN. Madam President, I am going to be brief, having spoken on this already once today. I simply want to highlight my sense of where all of this is. Back in 1998, along with Congressman Chris Cox, a Republican Congressman from California, one of the most market-oriented individuals I have ever seen in public service, he and I came together to write the original Internet Tax Freedom Act. The reason we did is we were concerned about discrimination, which looked as though it could do enormous damage to innovation and the future of the Internet. For example, we saw early on that if someone bought the newspaper in some jurisdiction online, they would pay a hefty tax. But if they bought the snail-mail edition, they would pay no tax.

So Congressman Cox and I, on a bipartisan basis, came together and said: ``We do not want to see that kind of discrimination against the future. We do not want to see that kind of discrimination against innovation and technology.'' So that is what the Internet Tax Freedom Act was all about in 1998. The subsequent reauthorizations were all about trying to build on that enormous success.

Congressman Cox and I thought the Internet tax freedom bill would be a success back in 1998. It has far exceeded expectations in terms of promoting innovation and small business and many of the concerns that all three colleagues have touched on.

So then to fast forward to today, I am the author of the legislation, with our colleague from South Dakota, Senator Thune, of the permanent Internet tax freedom extension. I will just say to colleagues: I would like nothing more--nothing more--than to be able to stand here today to see this enormously valuable piece of legislation made permanent now.

The reality, however, is--and we have seen it and heard about it--there are objections on both sides at this point to seeing the bill I wrote with Senator Thune--and Senator Cruz correctly notes that more than half of the Senate has co-sponsored--we have objections to seeing that bill move today. So the best thing that can be done now, for the hundreds of millions of American Internet users and the economy for which the Internet is a lifeline, is to extend the current ban until it is possible to lock in a path to pass a permanent extension.

This is not a political issue. That point has been made. There are a number of Democrats and Republicans who join myself and Senator Thune in supporting the permanent moratorium. There are a number of Republicans and Democrats opposing the extension of that moratorium, reluctantly. We will have that debate. They seem to think it is okay to impose discriminatory taxes on the Internet.

So it seems to me that no one who supports keeping the moratorium in place ought to object to a short-term extension now. Doing so only makes it more likely that Internet access and services would be subject to discriminatory taxation.

Let me now, in the interest of time, simply ask unanimous consent the Senate proceed to the consideration of S. 2735, a 2-month extension of the Internet Tax Freedom Act, to December 31, 2014, the text of which is at the desk; that the bill be read three times and passed, and the motion to reconsider be laid upon the table with no intervening action or debate.

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Mr. WYDEN. Madam President, very briefly to describe where I think the Internet tax debate is, we have Republicans and Democrats objecting to what I happen to think is in the country's national interest, and that is a permanent ban on Internet tax discrimination. So we have Republicans and Democrats objecting to that.

Now my colleague from Texas comes forward and says: OK, let's not do a 2-month extension because we don't want to consider this in the lame duck session.

But, colleagues, if you don't do the 2-month extension, the Internet Tax Freedom Act will have expired and you are still in the lame duck session. And by the time you get to the lame duck, millions of Americans will be vulnerable to discriminatory Internet taxes.

I am going to close this discussion by saying that in my view neither of the options is exactly ideal, because I think I made it very clear after 16 years that I would like to make permanent the ban against discriminatory taxes. Neither situation is ideal from my standpoint because Republicans and Democrats both object to doing that today. But what we know is that one option we have in front of us today is worse than the other, and the really bad option is to not do a short-term extension and leave millions of Americans vulnerable to discriminatory taxes.

With that, Madam President, I yield the floor.

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