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While it's too early to know how much support Enzi's bill will receive, foes of higher taxation are marshaling their allies. Sen. Ted Stevens, an Alaska Republican, said Wednesday that he'd like "to see an impregnable ban on taxes on the Internet."
A taxing question
Pro-tax and antitax forces are jockeying for position before a Net access tax moratorium expires in November. Also on the table: a proposal to usher in mandatory online sales taxes.
Enzi bill: Ushers in mandatory sales taxes on Internet purchases.
S. 156: Renews expiring access tax moratorium permanently.
H.R. 1077: Renews expiring access tax moratorium permanently and eliminates grandfather provision permitting nine states to collect taxes.
H.R. 763: Renews expiring access tax moratorium permanently.
Jeff Dircksen, the director of congressional analysis at the National Taxpayers Union in Alexandria, Va., said in written testimony prepared for the hearing: "If such a system of extraterritorial collection is allowed, Congress will have opened the door to any number of potential tax cartels that will eventually harm rather than help taxpayers."
Internet access taxes
A second category of higher Net taxes is technically unrelated, but is increasingly likely to be linked when legislation is debated in Congress later this year. That category involves access taxes, meaning taxes that local and state governments levy to single out broadband or dial-up connections. (See
CNET News.com's Tech Politics podcast this week with former House Majority Leader Dick Armey on this point.)
If the temporary federal moratorium is allowed to expire in November, states and municipalities will be allowed to levy a dizzying array of Net access taxes--meaning a monthly Internet connection bill could begin to resemble a telephone bill or airline ticket with innumerable and confusing fees tacked on at the end. In some states, telephone fees, taxes and surcharges run as high as 20 percent of the bill.
These fees that states levy on mobile phones, cable TV and landlines run far higher than state sales taxes at an average of 13.3 percent, cost the average household $264 a year, and total $41 billion annually, according to a report published by the Chicago-based Heartland Institute this month. Landlines are taxed at the highest rate, 17.23 percent, with Internet access being virtually tax free, with the exception of a few states that were grandfathered in a decade ago.
Dircksen, from the National Taxpayers Union, urged the Senate on Wednesday to "encourage economic growth and innovation in the telecommunications sector--in contrast to higher taxes, fees and additional regulation" by at least renewing the expiring moratorium, and preferably making it permanent. Broadband providers like Verizon Communications also want to make the ban permanent.
But state tax collectors are steadfastly opposed to any effort to renew the ban, let alone impose a permanent extension. Harley Duncan, the executive director of the Federation of Tax Administrators, said Wednesday that higher taxes will not discourage broadband adoption and his group "urges Congress not to extend the Act because it is disruptive of and poses long-term dangers for state and local fiscal systems."
Sen. Daniel Inouye, the influential Democratic chairman of the Senate Commerce committee, said: "Listening to the testimony, I would opt for a temporary extension, if at all."
If the moratorium expires, one ardent tax foe is predicting taxes on e-mail. A United Nations agency proposed in 1999 the idea of a 1-cent-per-100-message tax, but retreated after criticism. (A similar proposal, called bill "602P," is, however, actually an urban legend.)
"They might say, 'We have no interest in having taxes on e-mail,' but if we allow the prohibition on Internet taxes to expire, then you open the door on cities and towns and states to tax e-mail or other aspects of Internet access," said Sen. John Sununu, a New Hampshire Republican. "We need to be honest about what we're endorsing and what we're opposing."
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they are not happy with their income taxes, their sales taxes,
their gas taxes, the added fees for any use of state services.
They want more, more, more. And this is yet another hand in
our wallets. We are nothing more than money cows -- a source
of revenue for the states. Our governments (and the "leaders" in
it) seem to no longer serve the people. Instead, they look at us
only to serve their needs and they always need money.
What they are trying to do by allowing these new taxes is to spread the costs of government around. Perhaps its an attempt to hide the true cost of government with needless red tape associated with each tax, or perhaps its an honest attempt to evenly distribute taxes.
Either way, eliminating waste would make this increase in tax unneeded. Defeating this tax will simply make another tax go up unless spending does not decline.
I'm sure that when Yahoo, Google and some of the other companies start loosing broadband customers; they will have to rethink this whole tax thing. I will more than likely go back to the cheapest broadband of dialup if they start charging for emailing or IMing someone.
watch this, and hear 'we need more taxes', it kind of makes the
blood boil.
http://www.okcfox.com/players/news/news_video.shtml
Click on top stories, then from the list at right, "Waste of Time".
We haven't needed the internet tax for the last 230 years, so get out of my pocket.
High gas prices, raising food costs, and high taxes etc do not a strong economy make.
I for one don't think an email tax will ever happen, but if it does; I would go to the lowest common denominator for broadband or dare I say it dialup.
FTR - I know that the email circulating about 602P is a hoax... I just don't like the possibilities that are even being dicussed here when it comes to email taxation.
People who still send email, great for them, if they're too dumb to get Net educated then they deserve to pay the email tax. If anything, this will purely prove how dumb people are on the internet, it will prove in the end to be useless. I think they should just tax all the cell phoners out there, being that I don't own a cell phone and never plan to. Used to own one and then saw how outrageous the prices were, I think there's alot more people using cell phones then people online. They should push for this tax on cell phone plans, they could make alot more money.
I'm not sure if the cure is better or worse than the disease, though. If someone sends out a newsletter via email to subscribers who opted in, do they get counted as one email to hundreds or thousands of people, or do they get counted as hundreds or thousands of emails, each to one person?
This would be greatly short sighted. It would only serve to widen the digital divide and hamper big business.(I doubt China would adopt such a boondoggle) Luckily, as it will affect large corporations, I doubt their lobbyists would ever let this happen. We of course need taxes, absolutely. But making it even harder for kids living in poverty to access the most incredible, educational and most fantastic communication device ever invented? The printing press is widely regarded as the most important invention in history. The printer on our computers are peripherals. This will hurt economic growth, education and society as a whole. Once again, the Internet is being governed by people who don't understand it.
A third political party, comprised of internet users, would have considerable clout, if it didn't just create a new bunch of hogs at the feed trough.
wastes them that pisses me off. Education sucks, Health Care
sucks, Roads suck, and yet they vote themselves payraise after
payraise.
To bad most everbody in this country is too chickenshit to stand
and demand some accountability... Place is already delivered to
hell in a handbasket.
The cure is going to a lot more painfull than the disease...
However, since I'm not taxed merely to walk into the store, why should I be taxed merely to go online? Even with cell phones, which are taxed, the tax depends on the usage plan---so merely having a cellphone doesn't tax me.
As for the "it's hurting our police and schools", don't states already have many avenues for generating tax revenue, such as property tax? And, somehow, I doubt the new money will go to those ends anyways.
Of the lesser of the two evils, I'd be in favor of an Internet sales tax and a permanent moratorium on Net access. I'd prefer neither, but if that's not an option, that's my second favorite preference.
If we want to stop the Net tax idea, we need to write to our Senators and explain that it is not fair to tax any type of Net access.
Taxing your purchases is one thing, but double taxing is wrong. Our politicians are in Washington doing nothing good for us and the whole place needs to be changed out with the next few elections.
Enough already!
Keep the liberals out of my wallet and the conservatives out of my bedroom!
I see no reason why the local store down the road has to charge sales tax, but a sale across the internet does not. It puts local businesses at a disadvantage, and is quite unfair. If your state has a sales tax, it should apply to all transactions, equally.
And at least the liberals make an attempt to raise the money they spend. The conservatives (at least this crop of them) just spend and spend.
We already pay taxes for other communication devices (cell phones, land lines) so it also makes sense to tax internet access.
Charging a tax for email sent is one way to pretty much kill spam, but I don't see this working out too well.
Mind you, just cause I understand their reasoning doesn't mean I agree with them.
They tax us enough, let them use what they got more effectively, not tax us more.
Spam is not coming from US servers. (or is so in a very small amount). If this is not levied globally, they'll use Malaysian or Taiwanese servers to spam you...
Time to boot all incumbents out of office!
That is a message they will comprehend well!
Such taxes will kill many internet businesses for people pay enough in shipping. And I question whether a business in one state should have a right to levy and collect for another state.
As to tax on email? They've messed up the post office system, so now they're gonna tax email to get bucks out of us anyway?
We're right down to being taxed for the air we breathe. The internet in my opinion is like the airwaves and they don't tax every radio program, phone call we make, so I will resist to the last breath and type stroke.
Who do we write, appeal to, to put a quick and definitive end to this proposal.?
- What will happen during lean times?
- by sanenazok May 24, 2007 7:41 AM PDT
- Ok, so the US economy is doing "OK" right now - the stock market is breaking records, unemployment and inflation are both low. Still the local and state politicos are looking for more tax sources? I shudder to think what will happen when the economy goes through a recessionary cycle like it's bound to do. All I know that the biggest pusher for new taxes where I live (Chicago) is the governor who constantly creates new entitlements without having any means to pay for them. Let's see, he gives out free healthcare, free pensions for political placements, unionizes all state employees so he can't fire them, and big surprise the guy needs more taxes. I'm sure it's like this all over the place.
- Like this Reply to this comment
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- Maybe
- by Smiley5 May 24, 2007 7:48 AM PDT
- Maybe we all did come from outer space.
- Like this
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Showing 1 of 5 pages (180 Comments)Yay that's what I get for living in a blue state (but I guess republican/red states have the same kind of crapola).
Oh well, I'm starting a new tax-exempt religion. It'll be like scientology, except unlike scientology it'll be strange, involve some idiotic devices, and claim everyone who's on earth came from outer space. It'll be completely novel.