Reading Between the Party Lines

With the presidential candidates now campaigning in earnest, their positions on e-commerce are putting on enough flesh to make significant and specific differences visible to the naked eye.

True, when it comes to most high-tech issues, the manufactured drama and passionate rhetoric reveal no twists on the same old story. Democratic voters are more likely to use the part of the human brain that wrestles with moral and ethical considerations, and have hearts that either melt or bleed.

Republican voters are more inclined to vote with the portfolio oblongata — that part of the brain that weighs and measures what’s in the wallet. Their hearts either burst with patriotic fervor or turn to stone.

Visas and Taxes

Regardless of their supposed differences in demeanor, though, the two major parties are in general agreement that the New Economy must be nurtured and protected. But if one can manage to get past the sound-bite puffery, there are two issues that separate the parties and the candidates: first, visas for foreign high-tech workers; and second, a particularly important skirmish in the great political taxation war.

Both the Democrats and the Republicans want to raise the cap on H-1B visas, letting in more skilled immigrants to ease the high-tech worker shortage in the United States. Both Al Gore and George W. Bush have said they will back legislation to raise this year’s cap of 115,000 workers to 200,000. Furthermore, they both favor extending the new quotas for the next several years rather than allowing the cap to drop to 107,500 next year and to 65,000 in 2002, as current law requires.

Republicans and Labor Unite

However, Gore and the Democrats back the Clinton administration’s recently-stated policy to include a provision in the immigrant quota legislation that would grant amnesty to Latinos who came to the United States illegally — as far back as 1986.

The Republicans disagree. They want to admit only those who can perform specific services that are in high demand, those who would play a practical and economically favorable role in American society. The issue has made unlikely political bedfellows. On this score, the Republicans are in agreement with the labor unions.

At first glance, the Democrats’ position doesn’t seem to make sense. Tying Latino amnesty to quotas for highly-skilled, foreign workers is another costly, bleeding-heart scheme, some critics say. The liberals are trying to create a political loophole to make the point that unskilled workers deserve the same rights as engineers and other highly-skilled immigrants, opponents charge, and if their proposal succeeds, it will endanger the country’s prosperity.

The Republican stand seems to make common sense: Make room for the people who can contribute to economic growth. It would be better for e-commerce in the short run, but bad for the country in the long run. The fact is, “common sense” is an easy way to cloak discriminatory practices, but in the end, they invariably backfire.

The United States was built on the toil of all kinds of immigrants — not just those with the best skills and the most impressive degrees. The 21st Century is no time to reverse that basic American principle.

Will Gore Tax the Internet?

Another kind of discrimination is the topic of fiery political debate. Both parties say they favor a moratorium on “discriminatory” Internet taxes, but Bush goes one step further, saying that he will support congressional efforts to extend the moratorium to at least 2004. This, of course, is consistent with the Republican party’s policy of holding down taxation on any kind of commerce, not just e-commerce.

Gore has not come out in favor of an extended moratorium. His people say he is committed to finding a solution acceptable to both e-tailers and those who stand to benefit from Internet taxes — such as states and local governments.

Reading between the lines, that strongly suggests that Gore will support some form of Internet taxation — possibly before 2004.

Taxes Won’t Slow Growth

He should. Equalizing the tax system is the fair thing to do, not only for the states and local governments who depend on tax revenues to govern, but for the brick-and-mortar retailers who must collect taxes for the same goods, and who therefore suffer a competitive disadvantage.

New Economy radicals argue that taxing e-commerce will inhibit the explosive growth of the World Wide Web, but that is no more than a scare tactic. A fair and equitable Internet taxation program, phased in over time and with the proper inducements and incentives, will not stymie growth.

For those who believe that true democracy in a capitalistic economy demands a level global playing field, Internet taxation is both logical and inevitable. It won’t harm e-commerce — it will simply make everyone pay their fair shares.

The candidates’ differences on these issues may seem complicated, but they could have effects that are more far-reaching than some of the more accessible problems discussed in the presidential campaign. The outcome of the election will unquestionably have a profound impact on e-commerce and the high-tech world.

Visa quotas and Internet taxes are unlikely to swing many votes, but maybe they should.

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