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Internet

Forbes: No Net taxes for 5 years

A Washington compromise on Internet taxation has serious flaws, publisher and former GOP presidential candidate Steve Forbes says.

    NEW YORK--A Washington compromise on Internet taxation has serious flaws, publisher and former GOP presidential candidate Steve Forbes told a New York e-commerce conference today.

    Instead, Congress should enact the original version of the Cox-Widen bill, also called the Internet Tax Freedom Act, which calls for a five-year moratorium on taxing the Net, two years longer than the current proposal.

    "Give the Internet a chance to get out of the cradle," Forbes urged attendees at the Internet and Electronic Commerce conference today. "The bill does not give the Net any tax privileges."

    The Net tax compromise that drew Forbes's ire came after the National Governors' Association fought the Cox-Widen bill, whittling the measure's five-year moratorium down to three years. In addition, the compromise grandfathers existing Internet taxes and creates a commission on taxing the Net that Forbes said is stacked with pro-tax interests.

    Industry groups, including the Software Publishers Association, do not support the compromise.

    Forbes was bearish on international agreements on the Internet. "Europe is in the mode of taxation, so I'm now not too keen on international agreements because they would do more harm than good," he said.

    In a move that earned modest applause, Forbes also urged Congress to repeal a law that he said discriminates against computer programmers by not allowing them to operate as independent contractors. He also criticized the Federal Communications Commission for its special tax to provide universal access to the Internet, saying a free market will work better.