The Internet economy has grown by leaps and bounds, and nowhere is this more apparent than in California. Last year, information technology companies accounted for an estimated one-third of U.S. economic growth, driving up salaries and employment.1 A continuation of this robust new economy depends a great deal on maintaining responsible public policies at both state and federal levels.

Recently, debate has focused on whether or not to expand Internet taxation. Astronomical predictions for future e-commerce revenues abound, providing irresistible bait for state politicians and tax collectors. Determined to increase Net taxation, many pro-tax advocates are putting the new economy at great risk. Taxing the proverbial goose that lays the golden eggs is a mistake that California lawmakers should avoid.

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