It didn’t take Connolly long to realize that she had a story on her hands–and an issue with which to shake up the Y2K campaign. Trained in Washington by conservative columnist Robert Novak, she’s the new editorial page editor of the Manchester Union Leader, and is leading the local crusade to extend New Hampshire’s “Live free or die” ethos to cyberspace. Her cause: no taxation–ever–of any type of transaction on the Internet. A permanent ban, she says, would be a triumph for freedom in the new millennium.
Just in time for online Christmas shopping–and the New Hampshire primary–the issue of taxing the Internet is taking center stage in presidential politics. Questions about it have surfaced repeatedly in the early debates. In 1998 Congress passed a three-year moratorium on the taxation of sales by purely Internet-based businesses. A bipartisan commission, which meets this week in San Francisco, is studying what to do after 2001.
On the Republican side, the issue is turning into yet another headache Gov. George W. Bush doesn’t need. For his main rivals, an absolutist position is a no-brainer. Steve Forbes (the Union Leader’s darling) says that eternity is too soon to consider taxing the Internet. Sen. John McCain is for a “permanent ban” too. But Bush and his fellow governors fear that a mass migration of retail commerce to cyberspace could decimate Main Street–and drain state treasuries of sales-tax revenue. However, Bush is all too aware of New Hampshire’s antitax history. Bushes tend to stumble there. At first the governor said his next move would depend on the commission’s recommendations; now he says he wants to extend the ban for “several” years.
Bush can’t afford to seem the “protax” candidate in New Hampshire. Nor, for that matter, can Al Gore or Bill Bradley. Both support the current moratorium, but are wary of ceding a source of government revenue beyond that. The day before he fell ill in California, Bradley was grilled on the topic by Silicon Valley reporters. He hinted at support for an extension of the ban, but refused to endorse a “permanent” one. Gore is waiting for the commission’s report, due in April, and in the meantime has proposed a “duty-free” zone to prevent foreign countries from taxing transactions on their companies’ Web sites.
So far neither Gore nor Bradley has really tried to outmaneuver the other on the issue. But there are still seven long weeks until the New Hampshire primary. And while Bernadette Malone Connolly would never think of endorsing either of them, she might be willing–for a day or two–to say something nice.
