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A Capitol Mess

There are two things that are certain in the modern world: spam and taxes. And since Congress found itself in session far longer than it anticipated this year, it tried to tackle both. In the case of spam, our elected officials agreed on a federal bill to crack down on unsolicited e-mail. Things didn't quite work out as easily on taxes -- the Senate tried but failed to pass a permanent ban on Internet access taxes.

The imminent spam law sounds like a good idea, but as The New York Times reported, there's rarely any kind of legislation that will please everyone: "Despite public demand for legislative relief, sponsors said the measure, which would take effect on Jan. 1, would not immediately cut off the deluge of junk e-mail messages that makes up more over half of all e-mail traffic." One of the biggest problems that Sen. Jon Corzine (D-N.J.) had with the bill, the Times wrote, was that people can't sue spammers who make their e-mail in-boxes a living hell. * The New York Times: Antispam Bill Passes Senate by Voice Vote (Registration required) offered a quick summary of what the bill does: "The legislation would let the Federal Trade Commission establish a national 'do-not-spam' list similar to the popular national 'do-not-call' list. It also outlaws several common practices that spammers use to disguise the origins of their e-mail, including using falsified return addresses. Violators could face up to five years in prison and as much as $6 million in fines." A major complaint some people have with the bill is that it sweeps aside some state laws that feature stronger penalties against spammers, notably California and Washington state, reported. * Senate Passes Bill to Curb Spam.

On the tax front, reported that several senators adamantly opposed extending the ban because they think it will add to the billion-dollar cash drain that is forcing every state to reconsider its funding priorities for next year: "They say that new language in the bill could be interpreted to make all kinds of Internet services tax-exempt, including online movie and music downloads. They also are worried about losing revenues to Internet-based telephone services, which are becoming more popular. According to a September study by the Multistate Tax Commission , this could reduce state and local revenue bases by $8.75 billion annually by 2006." * Congress Fails to Act on Internet Tax Ban

The Los Angeles Times offered this quote from National Governors Association staffer David Quan : "There is a strong case made that the Internet is no longer a fledgling industry that needs to be protected and underwritten by the federal government. The Senate bill was going to undermine existing state and local revenues. I'm encouraged that the Senate will now take more time to look at a very difficult issue." * Los Angeles Times: Internet Tax Ban Bill Stalls in Senate (Registration required)

Whether state legislatures will take advantage of the Senate's inaction (they're not going to get to this again until early next year) and start taxing Internet access remains to be seen. Dow Jones reported that there was a last-minute attempt to get a short-term extension into a large federal spending package but that senators weren't even able to agree on that. * The Wall Street Journal: Senate Fails to Renew Internet Access Tax Ban (Subscription required)
Original Copywright 2003

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