Internet commerce is thriving in part because the U.S. Congress has exempted online sales and access from taxation. But the concept of a tax-free Internet is now facing serious threats. Congress has created an Advisory Commission on Electronic Commerce, which delivered a report on tax recommendations to Congress in April of 2000. Some members of the group clearly favor a tax of some sort judging by previous comments such as this one: "We must not allow the Internet to become a tax haven that drains the revenue governments need to provide the services that citizens demand," was how Commission member Joseph Guttentag, a top Treasury Department official, put it.

In other words: politicians are salivating at the prospect of grabbing a big piece of Internet commerce and sticking their fingers into a currently-forbidden corner of our wallets. Never mind that governments at all levels are awash in money, taxes are at record highs, and the "services" government provides are mostly coercive and grossly inefficient. 

As if taxes weren't bad enough, there's another sinister side to this. Guttentag and other Commission members worry that encryption might allow buyers and sellers to evade taxes. So, you guessed it. Exploring restrictions on encryption is also on the Commission's agenda.