Bush Campaign Lies

Monday, May 10, 2004

Bush Campaign Lie #50: Kerry Flip Flopped On Internet Taxation 

Once again, I feel compelled to point out that if this is the best the Bush campaign can do to try to prove that Kerry flip-flops, then they must really have nothing on him.

The support for this claim is two of Kerry's Senate votes, vote 306 in the 2nd session of the 105th Congress (10/7/98), and vote 341 in the 1st session of the 107th (11/15/01). In the first case, Kerry voted against tabling an amendment which imposed a moratorium on internet taxation, while 'grandfathering in' existing internet access taxes. In the second, Kerry voted against tabling an amendment to extend the moratorium, and to encourage states to adopt uniform practices on 'remote' transactions --- those accomplished via phone or mail order, as well as the internet.

So, it's not real clear how this amounts to a flip-flop. In both cases, Kerry supported the exact same moratorium. The only difference is that in the second case, he also supported tax fairness for all kinds of remote transactions.

For the sake of completeness, I should mention that the Bush folks also throw in part of Kerry's floor speech in support of the 2001 legislation. I think it's supposed to be misleading. For the sake of fairness, I'll include excerpts from Kerry's floor speeches on both the 1998 and 2001 legislation.

In 1998:

This bill was carefully negotiated to address competing equities. States and localities certainly have very real and legitimate needs to raise revenue to support vital state and community functions. By the same token, the Internet and the promise it holds for our economy, for schools, for children and families, and for our democracy is also very compelling. It is a wholly new medium whose mechanics, subtleties and nuances few of us really understand. I do not hear any Senator stating that electronic commerce should never be the basis of tax revenue, and I do not believe any Senator is trying to permanently deprive states of inherent privileges. Instead, the bill strives to create a brief period during which we in government and those in business can attempt to better understand this new medium and create a sensible policy that permits the medium to flourish as we all want.
Kerry supports the 1998 legislation as an effort to balance the need for states to raise revenue via taxation, and the need to allow the internet to flourish. So the 1998 legislation is an attempt to 'create a brief period' (like, say, three years) to allow everyone to determine the correct policy.

And so, three years later, we get to the 2001 legislation. The Senate has had a 'brief period' to consider how to balance the competing interests, and Kerry and others decided that extending the moratorium and encouraging the states to treat all remote transactions equally was the correct policy. The Senate disagreed. After the legislation was defeated, Kerry said (as the Bush folks remind us):

This was a very difficult vote for many of us. We do not support any tax on the Internet itself. We don't support access taxes. We don't support content taxes. We don't support discriminatory taxes. Many of us would like to see a permanent moratorium on all of those kinds of taxes.

At the same time, a lot of us were caught in a place where we thought it important to send the message that we have to get back to the table in order to come to a consensus as to how we equalize the economic playing field in the United States in a way that is fair.

I hope the Senator from Arizona will follow up with us, so we can come back to that table to do what is sensible and fair. I look forward to the chance to do that.
The 2001 policy was not a reversal of the 1998 policy. Rather, it was a natural outcome of it.

10:02 PM