The Tax War Goes Online: All the Candidates Oppose an Internet Sales Levy-For Now

By Fineman, Howard | Newsweek, December 20, 1999 | Go to article overview

The Tax War Goes Online: All the Candidates Oppose an Internet Sales Levy-For Now


Fineman, Howard, Newsweek


When Bernadette Malone Connolly moved from Washington, D.C., to New Hampshire, there were some things she already knew--and appreciated--about the state's political traditions. For one, it has neither an income tax nor a sales tax. For another, the locals value their image of ornery autonomy. Registered "independents" are free to crash either party's primary. But one thing surprised her. The state was full of Netheads. "It seems like everyone here is on the Internet," she says. She's right. Only Alaska has more modems per capita. From Concord south, the place is wired.

It didn't take Connolly long to realize that she had a story on her hands--and an issue with which to shake up the Y2K campaign. Trained in Washington by conservative columnist Robert Novak, she's the new editorial page editor of the Manchester Union Leader, and is leading the local crusade to extend New Hampshire's "Live free or die" ethos to cyberspace. Her cause: no taxation--ever--of any type of transaction on the Internet. A permanent ban, she says, would be a triumph for freedom in the new millennium.

Just in time for online Christmas shopping--and the New Hampshire primary--the issue of taxing the Internet is taking center stage in presidential politics. Questions about it have surfaced repeatedly in the early debates. In 1998 Congress passed a three-year moratorium on the taxation of sales by purely Internet-based businesses. A bipartisan commission, which meets this week in San Francisco, is studying what to do after 2001.

On the Republican side, the issue is turning into yet another headache Gov. …

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