This Orwellian worry isn't restricted to the political fringe: Democrat Ron Wyden, from sales tax–free Oregon, warns that allowing states to collect taxes from businesses outside their borders is just the first step down the slippery slope towards letting governments censor and control the Internet for more nefarious purposes. "The internet once again needs your help to push back against this unprecedented effort to apply local laws to a worldwide medium," he declares. "That hasn't happened in the past, and it's not going to work now."

It's true, the Internet has flourished as a zone largely free of government intervention. It's flourished so much, in fact, that purchases are migrating steadily online, and that trend will likely continue, with the rise of a generation of consumers for whom one-click buying is as natural as listening to music on their phones. It's not hard to imagine a future in which states' tax bases, without the revenue from online purchases, are whittled down to almost nothing. The Internet world is an ever growing part of the "real" world, and the two are becoming increasingly inseparable. If Internet commerce isn't held to the same basic standards, we could see our "real" world deteriorate at the expense of the virtual one.

Among the Internet's great virtues is its ability to make everything easy: setting up a business, communicating with customers, organizing records … and paying taxes. Opponents fret that it's unfair for online businesses to have to separate out different tax rates for 45 different states. But tools for managing sales and payments are already more than sophisticated enough to handle the task—every credit card has a billing address, after all—and the legislation requires states to provide appropriate software to the businesses it covers. Local governments that are legalizing online gambling are also legislating location-based online payments, having figured out how to pinpoint with near 100 percent accuracy where a customer is located. It might take a while for states to work out kinks in their systems, but to say it's impossible is to deny the reasons we value the Web in the first place.

Of course, there are better and worse ways to bring analog laws to the digital world—changing the underlying architecture of the Web to protect intellectual property, for example, would have done more harm than good. And certainly, there are times when the Web should just be left alone; just like in the real world, any kind of censorship or privacy-violating surveillance should be illegal. But saying we need to build a golden freedom fence around the Internet is like saying we shouldn't pass laws about the ocean or about the sky—two other frontiers of human enterprise that don't conform easily to local regulation, and yet need some rules of the road.