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  • Permanent Moratorium on Internet Taxation in Customs Bill

    February 11, 2016 1:24 PM

    Today the Senate voted 75-20 in favor of the conference report accompanying H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015, the so-called customs bill.

    While the majority of the bill deals with customs duties and procedures, there are some notable provisions in the conference report that won support. Chief among these is a permanent moratorium on Internet taxation, replacing temporary holds on states and localities taxing Internet access or placing multiple and discriminatory taxes on Internet commerce. That’s good news for consumers, who increasingly are purchasing goods and services on internet sites.

    A House amendment to H.R.644 specifically amends the Bipartisan Congressional Trade Priorities and Accountability Act (the Trade Promotion Authority Act) by ensuring that the negotiating objectives for trade agreements outlined there cannot include measures that would obligate the U.S. to limit greenhouse gas emissions.

  • PITFA a Poor Hostage for Internet Sales Taxes

    February 9, 2016 8:36 AM

    Despite the premise of many a political cartoon, U.S. senators aren’t stupid. But a few of them are hoping to bamboozle at least 60 of their colleagues into voting to strip the Permanent Internet Tax Freedom Act (PITFA) out of new customs legislation, the conference version of The Trade Facilitation and Trade Enforcement Act

    The House has already passed PITFA and it would permanently ban unpopular discriminatory taxes on Internet commerce and access being pursued by multiple state legislatures. The original ban has been extended with bipartisan support many times since its inception in 1998. It protects consumers from new and, if telecommunication taxes are any indication, typically high taxes related to accessing the Internet. Its permanence would be a boon for Internet users, innovators, and investors. On its merits, it’s hard to argue against PITFA.

    But as any disaffected primary voter will tell you, sometimes playing politics trumps merit inside the beltway. Case in point: a few senators are seeking to strip PITFA from the customs bill so they can tie a slam-dunk PITFA vote to the hugely unpopular Marketplace Fairness Act (MFA) they all support later on in the session. 

    For the merit-minded among us, it’s important to clarify that the MFA and its House-side equivalent, the Remote Transactions Parity Act, represent the largest expansion of state taxing powers in U.S. history. It would allow states to reach across their borders and tax businesses with no presence in that state. It’s a small business killer, an enabler for spendthrift state politicians, an example of crony capitalism, and is wildly unpopular with voters. It’s hard to argue for MFA on its merits. 

  • Coalition Tells Congress to Keep the Internet Tax-Free

    January 21, 2016 4:29 PM

    Today, the Competitive Enterprise Institute joined 44 organizations in signing a coalition letter urging Congress to extend and make permanent the Internet Tax Freedom Act (ITFA). The law, originally enacted in 1998 as a temporary measure barring states and their political subdivisions from imposing “[t]axes on Internet access” and “[m]ultiple or discriminatory taxes on electronic commerce.” What this means is that if you pay for home Internet service, your home state can’t impose taxes on the Internet portion of your monthly bill.

  • Why the Omnibus Shouldn't Include Cybersecurity Legislation

    December 15, 2015 6:42 PM

    Later this week, the House is slated to vote on a $1.1 trillion “omnibus” spending bill to fund the federal government through next fall. Naturally, the legislation will likely contain numerous riders and add-ons that address issues unrelated to appropriations, ranging from oil exports to compensation for 9/11 victims. But one potential addition to the lengthy omnibus bill is extremely troubling: according to several reports, House leaders are considering adding cybersecurity information sharing to the package. Rushing a cybersecurity bill through Congress before the holidays is premature, especially given how little we know about the details of a potential cyber addition to the omnibus.

    Congress has been busy with cybersecurity legislation this year. In October, the Senate passed the Cybersecurity Information Sharing Act, known as CISA. Earlier, in April, two cybersecurity bills passed the House—the Protecting Cyber Networks Act (PCNA) and the National Cybersecurity Protection Advancement Act (NCPAA). Each of these bills aims to tackle legal barriers that limit how companies can share what they learn about cyber attacks with other businesses or government agencies. But these three bills differ in certain key respects, so the two houses of Congress will need to reconcile these differences before sending any legislation to President Obama’s desk.

  • Net Neutrality Questions FCC Commissioners Need to Answer

    November 16, 2015 4:56 PM

    In a House Energy & Commerce Committee oversight hearing on Tuesday, November 17, all five Federal Communications Commissioners will testify. Net neutrality, the FCC’s broad push to control both the infrastructure and content of tomorrow’s Internet, with full support of America’s left-wing, will be a lead topic.

    The debate over net neutrality has been done to death and elements are subject to legal challenge. Yet even Republicans can’t let go of wanting to regulate boogeymen like so-called “throttling” and “discrimination,” so in that respect they have themselves improperly conceded a moral victory and undermined the advance of free, competitive enterprise and consumer welfare in infrastructure wealth.

    All this mess and distraction at a time when Congress needs to dismantle the FCC altogether.

    I think the best approach for the members is to frame all questions from the right perspective: that FCC’s entire purpose is outdated and its intervention destabilizing, anti-technology, anti-infrastructure—and just plain anti-Internet, and anti-neutral, for that matter.

  • CFPB's Database Should Be Bipartisan Privacy Concern

    November 12, 2015 4:43 PM

    ​The behemoth Consumer Financial Protection Bureau (CFPB) played a big role in Tuesday night’s GOP presidential debate on Fox Business, both during the commercials and in the candidate’s answers.

    A new ad by American Action Network that made its debut during commercial break correctly linked the CFPB—created by the Dodd-Frank so-called financial reform act rammed through Congress in 2010—to denial of mortgages and car loans due to the CFPB’s costly and paternalistic rules that hit Main Street bank and credit unions. The candidates critical of Dodd-Frank dinged those same policies, but often without naming the CFPB.

    Carly Fiorina called out the CFPB directly and for another disturbing policy. She pointed out that the CFPB is an entity with “no congressional oversight that is digging through hundreds of millions of your credit records.”

    The “digging” refers to CFPB’s massive database of mortgage and credit card info that rivals that of the National Security Agency in both size and intrusiveness. As former House Speaker Newt Gingrich wrote recently in The Wall Street Journal, “Every month the CFPB … gathers data on 22 million mortgages, 5.5 million student loans, two million bank accounts with overdraft fees, and hundreds of thousands of auto sales, credit scores and deposit advance loans.” My Competitive Enterprise Institute colleague Iain Murray and I have been writing about the troublesome database and its threat to privacy since the CFPB created it more than two years ago.

  • Passcode for Liberty: Why the Government Shouldn't Restrict Encryption (Video)

    November 4, 2015 4:43 PM

    Most Americans own a smartphone and use cloud computing services such as Gmail, Dropbox, and Facebook. Increasingly, we store sensitive data on our devices and in the cloud—but is it safe?

    On Tuesday, October 20, 2015, the Competitive Enterprise Institute held a briefing to discuss the current debate over data encryption. It was moderated by CEI Associate Director of Technology Studies Ryan Radia. Watch the video below:

  • As Senate Cybersecurity Vote Nears, CISA Remains Seriously Flawed

    October 26, 2015 9:13 PM

    This week, the U.S. Senate will vote on the Cybersecurity Information Sharing Act. Also known as “CISA,” the bill aims to improve cybersecurity by making it easier for companies and the government to share information about potential cyber threats with each other. (The latest version of CISA is here; a package of amendments slated to be voted on is here.) But CISA suffers from a serious flaw that Senate lawmakers have repeatedly ignored: the bill doesn’t put agencies on the hook if they misuse information shared with them in the name of cybersecurity.

    CISA’s basic premise—that information sharing can improve cybersecurity—makes sense, as I’ve long argued. Every day, big Internet companies deal with all kinds of cyber attacks, many of which target data that providers store on their customers’ behalf. Internet firms learn from the attacks they experience, and over time, they can improve the resiliency of their systems. Similarly, the more willing companies are to share information about cyber threats with federal agencies upon request, the better the government will be equipped to investigate and punish cyber criminals.

  • What Will a Chaffetz Speakership Mean for Internet Freedom? Part 2

    October 8, 2015 12:23 PM

    Utah Republican Congressman Jason Chaffetz recently threw his hat in the ring in a bid to replace Speaker John Boehner, after House Majority Leader Kevin McCarthy’s (R-Calif.) gaffe regarding the Benghazi investigation made the race far more open. As my colleague Jessica Melugin notes, Chaffetz considers himself one of the more tech-savvy members of Congress and a strong defender of the Tenth Amendment.

    Yet, Chaffetz has twice introduced the Restoration of America’ Wire Act (RAWA, H.R. 707), which would allow the federal government to overturn state laws that govern a wholly intrastate activity. Internet gambling has been around since the day the Internet made it into American homes. And Republican lawmakers have been trying to ban it—without much luck. So much for state sovereignty.

    There is no federal law directly governing Internet gambling, so the task has been left to the Department of Justice to interpret existing federal gaming laws. During the Clinton administration, DOJ defined online sports betting as unlawful. Then during George W. Bush’s administration, DOJ determined that all online gambling was illegal under U.S. law—an interpretation that held until 2011 when, pressed by state lotteries, the Obama DOJ returned to the previously held understanding: As long as the gambling is intrastate and not related sports betting, it is not illegal under federal law.

    This opened the door for states to legalize intrastate online gambling. Three states—New Jersey, Delaware, and Nevada—have done so. In addition, more than a dozen states have some form of lottery games available online.

    Unsurprisingly, casino magnate and GOP mega-donor Sheldon Adelson has poured millions of dollars into promoting legislation meant to crush the burgeoning online competition to his business. What is surprising is who in Congress is now pushing his federalism-trampling bill.

  • What Will a Chaffetz Speakership Mean for Internet Freedom?

    October 8, 2015 11:33 AM

    With House Majority Leader Kevin McCarthy’s (R-Calif.) gaffe regarding the Benghazi investigation, the race to replace outgoing Speaker John Boehner (R-Ohio) appears much more open. Days later, Utah Republican Jason Chaffetz seized the opportunity to announce his own bid for the Speaker’s gavel. The second-term congressman considers himself one of the more tech-savvy members of Congress, but how might a Chaffetz Speakership affect Internet freedom?

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