Week in review: The taxman cometh back

Momentum is growing, once again, for legislation that would impose taxes on Internet transactions and usage--and even on e-mail.

If you once scoffed at those e-mails warning of an e-mail tax, brace yourself: you may soon be paying a lot more to use the Internet.

The era of tax-free e-mail, Internet shopping and broadband connections could end this fall, if recent proposals in the U.S. Congress prove successful. State and local governments this week resumed a push to lobby Congress for far-reaching changes on two different fronts: gaining the ability to impose sales taxes on Net shopping, and being able to levy new monthly taxes on DSL and other Internet-service connections. One senator is even predicting taxes on e-mail.

Pro-tax advocates this week advanced a flurry of proposals pushing in that direction. A bill was introduced that would usher in mandatory sales tax collection for Internet purchases. Then, during a House of Representatives hearing the same day, politicians weighed whether to let a temporary ban on Net access taxes lapse when it expires on November 1. A House backer of another pro-sales tax bill said to expect a final version by July.

The response to the moves in CNET News.com's TalkBack forum was overwhelmingly negative, mostly along antitax convictions. However, some readers took a bigger-picture approach to the situation.

"Half the reason the Internet has become so successful is because the government has had little involvement," .

The U.S. Congress is also poised to create a set of massive new government databases that all employers must use to investigate the immigration status of current and future employees or face stiff penalties. The so-called Employment Eligibility Verification System would be established as part of a bill that senators began debating on Monday. The procedure that is likely to continue through June and would represent the most extensive rewrite of immigration and visa laws in a generation.

Because anyone who fails a database check would be out of a job, the proposed database already has drawn comparisons with the "no-fly list" and is being criticized by civil libertarians and business groups.

All employers--at least 7 million, according to the U.S. Chamber of Commerce--would be required to verify identity documents provided by both existing employees and potential hires, the legislation says. The data, including Social Security numbers, would be provided to Homeland Security, on penalty of perjury, and the government databases would provide a work authorization confirmation within three business days.

Crime and punishment
In their third effort to enact a federal law targeting spyware, members of the U.S. House of Representatives overwhelmingly approved criminal penalties aimed at anyone implanting certain types of malicious software on computers. The bill, called the Internet Spyware Prevention Act, or I-Spy for short, punishes anyone who intentionally causes software "to be copied onto" a computer--and damages it or steals personal information--with fines and up to five years in prison.

Among other things, the I-Spy Act attempts to make it unlawful to engage in various means of "taking control" of a user's computer, to collect personally identifiable information through keystroke loggers, and to modify a user's Internet settings, such as the browser's home page. It also includes a broad prohibition on collecting information about users or their behavior without notice and explicit consent.

In a reversal, MySpace.com unveiled a plan for cooperating with requests from state attorneys general for data pertaining to registered sex offenders. MySpace initially asserted it was legally unable to comply with the requests set forth in a letter sent earlier this month from the attorneys general of eight states. It appears, however, that an accord was struck late last week.

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