CNBC Business Center - Transcript

CNBC News Transcripts

SHOW: Business Center

HEADLINE: Senator Ron Wyden discusses the current ban on Internet access taxes

ANCHORS: RON INSANA; SUE HERERA

BODY:
RON INSANA, co-anchor:

The current ban on Internet access taxes is in jeopardy. The measure, in effect since 1998, prevents taxation on Internet access and double taxation on wedge-Web purchases. That expired on November 1st. The House passed a provision to make the ban permanent, which the White House supports. But legislation has languished in the Senate, where several Republicans have stalled action, saying it hurts states' ability to tax commerce to help their budget shortfalls. The author of the bill, Senator Ron Wyden of Oregon, is with us now and joins us to talk about it.

Senator, good to see you. Thanks for being with us tonight.

Senator RON WYDEN (Democrat, Oregon): Thank you.

INSANA: Now the-in-in an ironic twist, The Wall Street Journal, which is not necessarily supportive of the point of view of Democratic senators, in-in an editorial today supported your position on the ban on Internet taxes. Why is there so much trouble getting this passed?

Sen. WYDEN: Well, I think what's going on is some of these local governments see the Internet as really the last cash cow in the pasture. They haven't been able to tax mail-order sales. They haven't been able to tax phone sales, and they see this as one huge revenue stream. Now the legislatures ar-aren't meeting until-till January, so I hope nobody will step in and stick it to-to consumers over the holidays, but I-I can tell you, the last thing that the American economy needs is some sort of virtual Grinch hitting tax-hitting consumers with-with more taxes over the holidays.

SUE HERERA, co-anchor:

Senator, what about those who say, though, that the Internet, although it has grown tremendously, is still in its infancy? It's an industry or a form of commerce that-that needs the tax break and that if you do tax Internet access, you're going to be hurting a lot of small and fledgling businesses.

Sen. WYDEN: Well, I-I share that-that view. I-I think you really will hit people of modest means. Those are the folks that are already hammered by the digital divide. All we wanted was technological neutrality. The Internet shouldn't get a break, nor should the Internet be discriminated against. And right now, under the current regime, you can really hammer, for example, Internet access that is provided through wireless, through DS-DSL, and that's not right. What we want to do is make sure that we have the most competitive environment possible in the telecommunications and the information technology sector. We won't have it if we start seeing multiple and discriminatory taxes on-on the Internet.

INSANA: Senator, why are taxes on the Internet discriminatory when they are not discriminatory on brick-and-mortar retailers? I mean, if you get to the point where you don't want to tax one way of selling, why tax any ways at all?

Sen. WYDEN: Well, first-first of all, I-I'm sympathetic to the idea that you treat bricks and clicks simultaneously. The-the origins of my original law, for example, is we saw publications that were sent by e-mail facing no taxes. The online edition was taxed. That wasn't technological neutrality. That was the point of the original law. And right now, for example, you have DSL and wireless being hammered in some jurisdictions. Cable doesn't face those same kind of taxes. That's not going to promote competition, which is in the interest of all your viewers and your consumer.

HERERA: Senator, on another note, the filibuster that's going on on the Hill right now, a lot of people are worried that key legislation will not be passed and a lot of Americans will be left on the lurch on a variety of issues.

Sen. WYDEN: Well, I certainly hope this can be brought to an end. Senator Smith-Senator Gordon Smith and I have been able to get all of our judicial appointments through because we work in a bipartisan way. And it may sound like a quaint notion, but the only way you get anything important done in Washington, DC, is to reach out, to try to work in a bipartisan way, and I hope that this will all wrap up quickly, because the country doesn't benefit from this sort of polarization.

INSANA: Senator, what do you know about Medicare legislation? There's some discussion that they were getting close to at least a substantive consensus on the various pieces of Medicare reform legislation. And now late tonight there's some talk that we're not any closer today than we were a few days ago. What can you tell us?

Sen. WYDEN: Well, I think there's still a ways to go. But going back to my days-I was director of the Oregon Gray Panthers, a senior citizens' group. I-I felt that his was a critically im-important service for older people. We've got older people being put in hospitals because they can't afford their medicine on an outpatient basis. And I will say that there have been $400 billion earmarked for this program. That is, of course, an enormous sum of money. It doesn't come along every day, and I'm still hopeful that there can be a bipartisan agreement on this legislation. People ask me if the country can afford prescription drug coverage. I don't think this country can afford not to do it.

INSANA: All right. Senator, always good to see you. Thanks for joining us.

Sen. WYDEN: Thank you.

HERERA: Thank you, Senator.

INSANA: Ron Wyden, joining us tonight from Washington, DC.