What do Barbara Boxer and Chris Cox have in common? This is the sort of question that invites flip responses, like "an undying love of Sharpei puppies" or "a fondness for old Leonard Nimoy albums."

In fact, the liberal senator from Marin County and conservative congressman from Newport Beach share a conviction that a tax on Internet access amounts to a tax on social and economic progress. They both support a permanent renewal of the lapsed moratorium on Internet access taxes.

It is, perhaps, an unlikely alliance. But what's more surprising is that California's other senator, Dianne Feinstein, known for fairly sensible views on taxes and regulation, is opposed to extending the moratorium.

A move to extend the moratorium recently passed the House by a voice vote. The issue is now being debated in the Senate, where a cabal of former-governors-turned-senators, led by Lamar Alexander, George Voinovich and Tom Carper of Delaware, is opposing it. Strong opposition is also coming from the National Conference of Mayors. Feinstein, a former mayor of San Francisco, is falling in line with her former city hall peers.

In so doing, she is falling out of step with her fellow Californians – and the Golden State's need for tax policies that could help revive its struggling high-tech sector.

According to a report issued by the American Electronics Association, the nation's largest high-tech trade association, California's high-tech employment dropped by 11 percent in 2002. California's high-tech exports dropped by 21 percent. Venture capital spending in California dropped by 43 percent.

How, then, could Sen. Feinstein be in favor of a tax on such a vital California industry? Feinstein portrays her position as one of fiscal responsibility. "This issue has energized cities like no other issue I have seen," she said.

State and local governments are energized because they have been told by opponents of the moratorium that they stand to lose up to $22 billion a year. This simply is not true. The extension of a moratorium on Internet tax access is, by definition, revenue neutral.

Where, then, did the $22 billion figure come from? This is the total amount of existing telecommunications taxes, levied largely on phone bills, but this revenue would remain almost entirely unaffected.

The permanent extension would merely broaden and update the definition of Internet access to include relatively new technologies like Digital Subscriber Lines and wireless access, a sensible addition to provide equal treatment among methods of getting Internet access, be it via cable, telephone line, or wireless. As it stands, only cable is free from Internet access taxes.

What would be the impact of Sen. Feinstein's allegiance to the position of the National Conference of Mayors? High taxes on Internet access would almost certainly discourage the rollout of high-speed Internet, or broadband. Policies that discourage broadband carry a steep opportunity cost.

Wayne Brough, chief economist at CSE Freedom Works Foundation, estimates that the widespread rollout of broadband would create about 170,000 jobs in telecom and related businesses in California, sparking $90 billion in new economic output. If only a fraction of Brough's results actually occurred, it would still be an impressive return on a policy that requires no government outlays.

Internet access taxes could also heap $150 a year to the price of Internet access for low-income Americans. Internet usage is growing most quickly among households making less than $50,000 a year. For these Americans, the cost of e-mailing, looking for a job via Internet classifieds, online education and contact with the DMV could all be raised out of reach.

Taxing access to the Internet would also force public institutions, such as schools, hospitals, and libraries, to pay higher prices to access the Internet. Given that so much of California's economy is fueled by growth in the Internet, a tax that retards the growth of Internet services will have a bigger impact on the Golden State than on, say, Tennessee.

Dianne Feinstein should rethink her position. She belongs with Barbara,
Chris – and the rest of California.