The report of the deeply divided Advisory Commission on Electronic Commerce was formally delivered to the House telecommunications subcommittee Thursday and was promptly praised by Republicans and denounced by Democrats on the panel.
Republicans on the panel, led by Rep. Thomas Bliley, praised Virginia Republican Gov. James A. Gilmore III, chairman of the 19 member advisory panel, for achieving a majority view even though the report fell short of the two-third votes needed for a formal recommendation to Congress.
At the same time he blasted the commission’s three Clinton Administration members for not supporting the majority’s “common-sense proposals” and endorsing the “hidden agenda” of pro-tax forces who want Internet transactions to be taxed.
The commission last week, by a simple majority instead of the required “super majority” of 15, approved a report that also recommended extending the current moratorium on Internet taxes by five years. The moratorium is to expire in October 2002.
Other recommendations included elimination of the century-old 3% federal excise tax on telecommunications and the creation of a new advisory panel to develop standards leading toward the simplification of existing state and local tax systems.
“I heartily endorse the majority proposals,” said Bliley, a subcommittee member and chairman of its parent, the House Commerce Committee.
Gilmore, who is expected to present the report to Senate Commerce Committee at a hearing on a bill extending the Internet tax moratorium through the end of 2006, noted that the trio “joined the pro-tax block and never deviated” from that position.
Rep. Christopher Cox (R-CA), an ardent foe of Internet taxation, said Congress “cannot apply the tax policies developed for a smokestack industry to the new economy.”
Rep. John Dingle (D-MI), the panel’s ranking minority members summed up the Democrat position on the report saying “many of us in Congress will be obliged to treat the bulk of the commission’s report as though it were never presented” because its recommendations were only endorsed by a simple majority of the commission instead of the required two-thirds majority.
He explained that when the study panel was created the two-thirds majority was included “to make sure that Congress could greatly rely on [its] findings and recommendations since they were expected to be truly representative of a consensus view.”
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