Rep. Chris Cannon, R-Utah

This is a partial transcript from Your World with Neil Cavuto, October 21, 2003, that was edited for clarity.

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NEIL CAVUTO, HOST: Don’t look now, but the free ride is over -- or close to it. The last bastion resistant to the taxman could be about to fall. Some in Congress leading a charge to slap a tax on all goodies bought on the Internet -- and all transactions driven through the Internet -- which enrages my next guest.

Utah Republican Congressman Chris Cannon says there’s no better way to kill a new technology than to tax the folks using that technology.

Congressman, good to have you.

REP. CHRIS CANNON, R-UTAH: It’s always nice to be here with you, Neil.

CAVUTO: What is at stake here?

CANNON: Well, this is a big issue. You know, the states are trying to create this Streamlined Sales Tax Program, sometimes called the Streamlined Sales Tax Agreement. It’s the idea that you would somehow create a national simplified context for gouging us all again for that little extra tax dollar that might otherwise be spent on the Internet.

CAVUTO: Where are we going with this, though, because, as you know, Congressman, a lot of street retailers in small towns and elsewhere have long been arguing that the Internet has a distinct advantage and they might as well level the playing field, not only for purchases over the Internet, but down the road for anyone who climbs on the Internet.

CANNON: Well, you know, this idea of leveling the playing field doesn’t make much sense to me because they’re such entirely different contexts for doing business or acting or operating in life.

Let me just say that, for me, the really important thing right now is to get the Internet Tax Freedom Act passed so we have no taxes on access to the Internet, and I’ve actually not taken a position on the SSTP yet because it’s so much more important to me to get that Internet Tax Freedom Act passed and signed by the president. We’re waiting on the Senate to do that, would encourage them to move that, by the way.

But, on this issue, it’s a very, very complex issue, let me just say, and the idea that you’re going to have simplification when you’re really dealing with real complexity is what we’re going to have to look at in Congress, and we’re going to have to examine whether that makes sense or not. It might just be interesting to consider, for those who are looking at this and saying we ought to level the playing field, that you can’t do this without creating a new federalism.

You have to have a new federal organization that is going to oversee the states, and it’s not the federal government but...

CAVUTO: But they’re doing it because states, all the way up to Uncle Sam, sir, say they need the money. What do you say?

CANNON: Well, look, we don’t exist in Congress to feed an addiction. The states need to do exactly what the federal government needs to do, and that is to get our fiscal houses in order.

I mean, you know, you haven’t talked about it recently, I haven’t heard, but we have this 1-1/2-point increase in interest rates, which is derived from nothing but the fact that we in Congress can’t keep control of our budget. So let’s control our budgets and deal with the future that way.

In the first place, you’ll never get enough money for an income tax or a tax on the Internet in time to help any of the states with their current fiscal problems.

In the second place, it may never happen, so let’s get used to it and put our houses in order otherwise.

And then finally, let’s make a rational decision on whether or not we really want to create this monstrous, new, simplified program.

CAVUTO: All right. Congressman Chris Cannon.

Thank you, sir. I appreciate it.

CANNON: Pleasure.

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