Faced with such a scenario, the pro-active question becomes how should such a thing be done. And the answer?

Very carefully.

***

Let's begin with a news update for those who might have missed it. A blue-ribbon federal panel, the Advisory Commission on Electronic Commerce, is slated to have recommendations ready for Congress next March.

Now as an ex-reporter, I can tell you the standard reaction to any blue-ribbon panel is a yawn, but as a netizen, I can predict that's not going to happen here.

The first meeting in June was, to put it politely, not exactly a smashing success -- hours and hours of testimony that totalled not much.

Turns out, though, that this commission is headed by Virginia Gov. Jim Gilmore, a no-nonsense type, son of a meat-cutter, former GI, very average Joe. He put David Pottruck, president and co-CEO of Charles Schwab Inc., in charge of a subpanel and he gave him serious marching orders -- narrow the field, make some priorities, get down to the possible instead of endlessly messing with the abstract.

A transcript of that panel's Aug. 6th conference-call meeting is available on the web (God bless the Information Age) but to nutshell it here, the gov got people cracking. There are now five basic issues on the working projects list, with the top one being the lifting of the current ban on new Internet sales taxes.

Topic two -- though the conference callers stressed the topics were not in order of importance -- is the issue of non-taxed e-sellers versus taxed Mom-and-Pop stores. Topic three is the idea of giving low-tax and no-tax advocates a chance to argue why the government should keep its always-hungry hands off the Internet. Topic four is the bewildering array of fees paid by telephone companies and ISPs and cable companies and that entire regulatory mess, and topic five could be the most complicated issue of all -- how local taxes could work on a global electronic economy.

If all that wasn't enough, consider one more factor in this affair.

Politics.

***

Money is one reason why this will not be an ordinary blue-ribbon commission that writes a report that no ones read and fades into the sunset. The other reason is politics. It's interesting to note the final report will be delivered in Texas, that the governor of Texas is running for president, and that as a presidential candidate, Governor Bush could use some ammunition against the man who invented the Internet. Considering we're talking Republicans here, taxes -- no, more specifically, tax relief -- is a mantra.

It's a safe bet that the idea of sweeping tax relief will spring from this commission because one of its members is Grover Norquist, president of the Washington lobbying outfit "Americans for Tax Reform." I used to really dig this guy's style, and I generally agreed with most of his positions; however, once Mother Jones revealed he had sold out and starting taking big bucks from Microsoft (the Internet version of lobbying for The Evil Empire), I tuned him out. But whether I tune him out is of no consequence; the fact remains he's a force to be reckoned with.

Governor Gilmore's presence will be felt as well. The foundation of his gubernatorial campaign was eliminating a hated and unnecessary personal property tax on cars. This should not be underestimated; neither should the fact that, as the Wall Street Journal put, he's a new breed of politician -- he makes few promises, but he keeps them.

So anyway, the difference between being a mainstream reporter, and merely telling y'all what these folks are up to, and a self-published Internet columnist is that as a columnist, I can offer some opinions.

And if I had a chance to talk about this over a beer at Phil's Continental Lounge (hey, the gov currently lives in that neighborhood), here's what I would say.

***

There's an old saying among strident supporters of the Second Amendment that the government should fear its citizenry. Considering the anarchist-libertarian-cowboy bent of many netizens, fear is not too strong a word. Any politician who doesn't understand the on-line world, and who approaches web commerce as a cash cow in need of milking, will wind up stunned at the response. That means the first bar on any Internet tax is a simple one -- it must be justifiable.

The second test is that it must be fair. Now I can tell you that by inclination and upbringing, I'll always be anti-establishment, but I'm also a 41-year-old businessman who has outgrown a lot of libertarian nonsense. And the simple fact is, even though I want to link up with the people crying "Keep your jackboots off my infobahn," it is inherrently unfair to tax Mom-and-Pop Main Street transactions while exempting e-commerce. Mom-and-Pops have already taken a terrible beating thanks to the Sprawl Marts of the world.

The answer here is not to burden e-commerce with the same crap the Mom-and-Pops have to put up with; it's easing the burden on the Mom-and-Pops. Simplifying taxes for the Internet provides the opportunity to simplify taxes for all, and here's to hoping some politician has the sense to seize that opportunity.

The final test is simplicity -- simplicity to the level of invisibility. It would be far easier to pay a tax when you sign up for your ISP than to try and tax a gazillion transactions. (The city of Richmond currently charges me a utility tax every month; the rationale, aside from money-grubbing, escapes me.). Leave Internet commerce alone, and use a tax on Internet access to provide tax relief for those who need it. How much more simple could you make it?

As a final point, if government wants to tax electronic transactions, a better place to start is with the movement of stocks and bonds. The history of my adult life is the rich getting richer, and while securities trading is a far more lucrative field than the Internet, taxing it will never happen. Modern politics is money versus votes and the money is winning; far from seeing stock-churning and day-trading taxed, we're more likely to see tax cuts for the rich. I mean, think about it; we've already got a zillionaire presidential candidate who's not only asking poor people for campaign contributions, he's pushing a plan which would personally save him hundreds of millions of dollars. Now that's integrity for you.

Any attempt at taxing the Net is going to vigorously opposed unless it's justified, fair and simple. As a soundbite, that's easy enough; as a policy to implement, it's a helluva lot of work.

Good luck, governor. I suspect you may need it.

***