FRIDAY BRIEF
September 7, 2001
Volume 29, Issue #1

CONGRESS RETURNS TO SESSION WITH MANY PRIORITIES

Congress is back in session after a month-long summer break, and the members are now working on legislative priorities for the fall. The House of Representatives will lead efforts in Congress on an agenda promoting economic growth. While the media lights will be focused primarily on 13 appropriations bills that will be high on the legislative agenda, House leadership will also be working diligently to promote measures to help fatten up an anemic U.S. economy. Be on the lookout for several efforts that will be pushed in the months ahead, including:

Trade Promotion Authority – This executive power, which was not renewed by Congress in 1994, allows the President or the U.S. Trade Representative the authority to enter into trade negotiations or lower U.S. export barriers. Congress would then have a 90-day period to vote up or down on any trade agreement, without adding amendments. This will allow America to become more involved in multilateral and regional trade agreements to bolster the U.S. economy.

Reducing the Capital Gains Tax – Efforts are also being made to enact a reduction in the capital gains tax in order to spur economic growth.

·Making permanent the 2001 tax cut – Efforts are also underway to shore up the President's tax cut legislation, making permanent the tax cuts that have been enacted in 2001.

·Spending Cuts – House leadership is reviewing measures for needed spending cuts in the Federal budget.

·Extension of the moratorium on Internet Taxes – Bills are being considered by the House and the Senate to make permanent the current moratorium on taxes related to the Internet. The moratorium ends in October.

INTERNET TAX MORATORIUM

A major initiative is currently working to make permanent the moratorium on Internet taxes. Two bills have been put forward in Congress: S. 777, introduced in the Senate by Senator George Allen of Virginia, and H.R. 1675, introduced in the House by Representative Chris Cox of California. Both propose to permanently extend a moratorium on Internet taxes that first arose from the Tax Freedom Act of 1998. The current moratorium is set to expire in October 2001.

With the U.S. economy experiencing a slowdown and the high-tech industry suffering as well, any taxes on the Internet will only serve to further impede our economic growth. As well, taxes on the Internet will make the costs of access to it increase, displacing millions of Americans from the net including those on fixed and low incomes who can benefit most from its use.