May 23, 2007 10:10 PM PDT

Net taxes could arrive by this fall

(continued from previous page)

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."

Previous page
Page 1 | 2

See more CNET content tagged:
tax, Governor, Amazon.com Inc., fall, senator

181 comments

Join the conversation!
Add your comment
Are we just money cows?
States are salivating at the opportunity to tax us yet again. No,
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.
Posted by m.meister (278 comments )
Reply Link Flag
Herded & Milked
You got that one right!
Posted by ecotopian--2008 (451 comments )
Link Flag
No free lunch
There's no such thing as a free lunch. You can't have your roads, police, schools, and health services and keep your tax money too. Yes, there is a lot of corruption, wasteful spending, and shady programs out there. But we should instead focus our attention on ridding our government of those things rather than focusing on fighting taxes which really can go to those good, useful things.

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.
Posted by airwalkery2k (117 comments )
Link Flag
Can you say Boy Cot....I knew you could :-}
Well let's hope that some one brings them to their senses before any of this happens.

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.
Posted by rebert3 (7 comments )
Link Flag
and here's how they spend our tax dollars
Have a look at this story by an OKC television station. When you
watch this, and hear 'we need more taxes', it kind of makes the
blood boil.

<a class="jive-link-external" href="http://www.okcfox.com/players/news/news_video.shtml" target="_newWindow">http://www.okcfox.com/players/news/news_video.shtml</a>

Click on top stories, then from the list at right, "Waste of Time".
Posted by waspnest (8 comments )
Link Flag
WE TAX OUR TAXES TOO
I agree we are just money cows. Our real problem is the monopoly that the Democrats and Republicans have on our country. We need a third party.
Posted by abbottpark (42 comments )
Link Flag
Money Cow or Sow Pig
Either way the "piglettes" are going to suck the sow dry. The sow only has so many teats and there are 10 politicians sucking off each teat. Do the math and see how long this can continue befor the sow dries up.
Posted by bigonegotaway (4 comments )
Link Flag
Streamlined Sales Tax Agreement
I can just imagine how many hundres of pages that "Streamlined Sales Tax Agreement" is going to have......

We haven't needed the internet tax for the last 230 years, so get out of my pocket.
Posted by thehsm (6 comments )
Reply Link Flag
Read My Lips...
Just another example of politicans telling everyone that they didn't raise your income taxes...but having nothing to say about the other taxes everyone is straddled with. Guess all of the politicians will say the same thing "Sen." Clinton said about Iraq war funding..."I'll say something when I have something to say." or don't bother asking me about any subject I don't want to give you an honest answer about.
Posted by furball123A (124 comments )
Reply Link Flag
As if they don't already take enough money out of peoples pockets
and waste it. States should start cutting the fat out their budgets instead of looking to levy new taxes. In Illinois job growth remains pathetic but our governor proposed a tax increase that would have put Illinois in the top 10 for local tax burden.
High gas prices, raising food costs, and high taxes etc do not a strong economy make.
Posted by unknown unknown (1951 comments )
Reply Link Flag
Fund illegal immigrants
Because of failure of US government to protect our southern border, the states are burdened by the cost [to taxpayers] of funding services to the illegals. We are being invaded by Mexico; the Mexican government is sending their citizens without fear of retribution because these are "unarmed" harmless poor people. Then they remit their earning back to Mexico. Now everyone has to pay, and pay more as the governments will try to find all possibilities to get more.
Posted by RayWMah (1 comment )
Link Flag
Taxes taxes
Well I don't think that the E-mail tax would fly, because all it would do is make a whole buch of people drop broadband. I mean why would you want to pay alot of extra money for internet service if they're going to keep inflating the price.

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.
Posted by rebert3 (7 comments )
Reply Link Flag
may add "flat" tax to all internet service
The way the state will get around is adding a flat amount to all internet access. You want internet access, pay the govt $5. It won't matter if it is the fastest fiber or dial-up.
Posted by tbuccelli (115 comments )
Link Flag
Email Tax?
So if some state government decided to enact an email tax, how would it be levied? Is my email client going to be required to keep a log of how many emails I sent and received and transmit this information to my local taxing authority? What about spam? I don't ask for this email, and at this point it's an annoyance. But now I have to pay for the spam I receive if they want to tax email. This to me would be the ultimate screwing over of the public by the politicians.

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.
Posted by 04Outlander (16 comments )
Reply Link Flag
The solution is pretty simple
Programs like ICQ or instant messaaging programs that are free to send messages will still be around. Also in some mmorpg's, most of them, they also have an email system, they won't be able to tax that, plus think about BBS or forums like this one. Plus the ability to send private messages. There are tons of ways around this goofy email tax and I think all of this will be brought to the attention of people trying to get this passed.

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.
Posted by kurgun5000 (5 comments )
Link Flag
One benefit of an email tax
If ISPs start sending people bills for $1000 for the hundred thousand spam emails their compromised machine sent out last month (and that's a low count, I'm guessing compromised machines probably send out millions of emails during the course of their infection) people might actually go out and try to clean up their machines.

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?
Posted by Wybaar (3 comments )
Link Flag
TAX THERE EMAIL TOO
JUST TAX AGAIN AND AGAIN!
Posted by abbottpark (42 comments )
Link Flag
Net Taxes
If they pass a law that we have to pay taxes on e-mails then we need to remember who boted this in and then not vote for them when they run again. We have why to many taxes to pay now.
Posted by Carol L (2 comments )
Reply Link Flag
Why we have taxes
Governance remains an absolute necessity and it must be supported financially by those who own it and benefit from it. Most nations do so mainly through taxes. However, taxes without needed governance amount to extortion of the weak by the powerful. Wherein does the Internet-based email system benefit from governance that is not already supported? A government cannot or will not protect me and my children from predators deserves no taxes from me.
Posted by Ngallendou (27 comments )
Link Flag
Internet access taxes
Internet access taxes

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.
Posted by dannx3d (2 comments )
Reply Link Flag
Chinese taxes
As it is, the Chinese pay only about $10/month for cellular service and can buy a Jeep Grand Cherokee, made in China, for under $11,000. What we pay includes all the state and federal hidden taxes. That's one reason (but not the only one) why our economy is in decline compared to the rest of the industrialized world. Adding another tax, this time on the internet, will accelerate that process.

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.
Posted by baldguy61 (63 comments )
Link Flag
Internet access already taxed
My Internet service is already taxed. Verizon - my ISP - collects the tax for the government. So what is this, a tax on a tax? We, the people, have to live within the limits of our earnings, while the government lives on what it takes from us. And if they don't get enough, they just dig deeper into our pockets. It's time to take action against these taxation tyrants!
Posted by Chuckabutty (4 comments )
Reply Link Flag
Taxes Taxes Taxes...
I have no problem paying taxes...It's the way our government
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...
Posted by Al E. Gator (21 comments )
Reply Link Flag
No doubt,
but will the cure come is the question.
Posted by suyts (824 comments )
Link Flag
I see their point, partially
I can understand the concern about taxing sales on the Internet. Yes, we have to pay shipping, but all retailers have to pay shipping in one form or another (how would, say, Wal-Mart get their items to the store without incurring some charge). Much as I dislike the idea of paying more, at least that is fair to brick-and-mortar retailers.

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.
Posted by bluemist9999 (1020 comments )
Reply Link Flag
We do pay taxes
Look at your cell phone bill, you have various taxes charged just to have the phone number and service. Also, the bill for internet service, regardless of the type, charges considerable taxes on you. We don't need any more taxes on internet.

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.
Posted by Smiley5 (9 comments )
Link Flag
No new taxes!
I already pay enough taxes. They tax everything that moves once and everything that stops moving twice!

Enough already!

Keep the liberals out of my wallet and the conservatives out of my bedroom!
Posted by ejryder3 (39 comments )
Reply Link Flag
It is not a new tax
Sales and access taxes have existed for quite some time.
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.
Posted by catch23 (436 comments )
Link Flag
oh come on
The "liberals" haven't been in power for 8 years and 40 trillion has been wasted on the Iraqi occupation. If it wasn't for "liberals" we wouldn't have the highway system, social security and medicare, just to mention a few great things "liberals" have done. So stop spouting Limbaugh talking points and get informed.
Posted by nonaste (30 comments )
Link Flag
Congress of the People?
I thought this new Congress was supportive of the Internet and computer users in general, and always looking out for the downtrodden and oppressed! Now, the only thing that stands in the way of them and new taxation is the hated George Bush! Those of you who voted for the Democrats: you were warned.
Posted by mycroft69 (19 comments )
Reply Link Flag
INDEED
WE THE PEOPLE CANNOT TRUST ANYONE IN WASHINGTON D.C. OR ANYONE AT ANY LEVEL (LOCAL, STATE,OR FERERAL FOR THAT MATTER)! THEY ALL SUPPORT LEGAL THEFT THAT THEY CALL TAXES. THEY ALL CLAIM THEY WILL CLEAN THINGS UP WHEN THEY GET IN OFFICE WHEN THE TRUTH IS THINGS JUST GET WORSE AND WORSE! GOD HELP US ALL!
Posted by BCurrent (4 comments )
Link Flag
They don't care,
in fact most secretly applaud this motion. Wealth redistribution is the name, tyranny is the game.
Posted by suyts (824 comments )
Link Flag
Taxes
We already pay a salex tax for just about everything we buy, so it makes sense for them to try to tax internet sales.

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.
Posted by thedreaming (573 comments )
Reply Link Flag
Kill spam!?
You make me laugh!
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...
Posted by Kostagh (57 comments )
Link Flag
No more.
Don't know about most of you people, but I can't afford any more taxes coming out. They are taxing us to death already and then they tax you when you die and tax your estate. We need new people in Congress and the White House that are not wealthy and understand what the common person is going through.
Posted by Smiley5 (9 comments )
Link Flag
Typical democrats
Tax and spend. Tax and spend. Granted, the republicans were spend and get in debt. What we really need is a congress that mandates efficiency, no pork projects, and lower taxes. But that isn't going to happen.
Posted by i_am_still_wade (250 comments )
Reply Link Flag
You realize this article is about a bill a Republican is sponsoring?
I guess you didn't actually read the article. The issue about taxing goods sold on the Internet generally is divided by States that have large etailers and the ones that don't. Wyoming isn't exactly a hot bed of Internet startups.
Posted by smithrl (11 comments )
Link Flag
All politicians like taxes...
Tax and spend Democrats, Borrow and spend Republicans. What's the diff. They both like increasing taxes, one party just talks up tax reduction a lot because the plebs think they really are going to get it, but in real life, if you beleive that, I've got a bridge to sell you.
Posted by boratebomber (26 comments )
Link Flag
IT'S TIME FOR LEGAL THEFT TO STOP!
We all just need to say no to any new taxes and cut most others! These A**holes don't have a clue! The answer is not new taxes,it is to SPEND LESS! They need to stop stealing from the people they were elected TO SERVE!
Posted by BCurrent (4 comments )
Reply Link Flag
Serving
They are only serving themselves and their special interests that puts money in their pockets. It is like Robin Hood except, they steal from the poor and give to the rich.
Posted by Smiley5 (9 comments )
Link Flag
tax on tax
Couldn't have said it better buddy!!!
Posted by montefraya (3 comments )
Reply Link Flag
What part of F*** OFF do they not understand?
They can stick their taxes where the official sun does not shine.... The time for tax revolt is well past. Catch Me, Screw me!
Time to boot all incumbents out of office!
That is a message they will comprehend well!
Posted by Expat type (30 comments )
Reply Link Flag
Clean House
Time to clean house.
Posted by Smiley5 (9 comments )
Link Flag
Checking Ammo Drawer
OK, the battle is on. Who do we write, picket, campaign to put the kaibosh on this outrageous nonsense.

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.?
Posted by RubySnow1 (3 comments )
Reply Link Flag
What will happen during lean times?
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.

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.
Posted by sanenazok (3449 comments )
Reply Link Flag
Maybe
Maybe we all did come from outer space.
Posted by Smiley5 (9 comments )
Link Flag
Internet access is already being taxed
The fact is that you're getting your internet access via your telephone company or your cable service and those companies are already paying access taxes, all the temporary moratorium has held off has been a direct tax on the service itself.

It shows how small and petty those governments can get that they want to be able to tax that one item they've been prevented from reaching for, evidently these polititions haven't remembered the tales of Pandora's box or the Forbidden Fruit. Simply because it's been forbidden they've decided they must tax it.

Sales taxes in combination with income taxes are a wrong compounded since it's effectively burning the candle (i.e. Real Wages) at both ends and because the sales tax is levied against an already reduced income it's taking a larger percentage of the original income than it appears.

However, if all the taxes you paid were all levied via a single tax then you'd see how huge your tax bill really is and there's not a politition who'd long remain in office. That's the real reason why they want to break up the taxes into lot's of small taxes taken in small ways.
Posted by extinctone (214 comments )
Reply Link Flag
Repeat of history?
Wasn't taxation one of the main causes of the American Revolution?

<a class="jive-link-external" href="http://odur.let.rug.nl/~usa/E/revolution/revo2.htm" target="_newWindow">http://odur.let.rug.nl/~usa/E/revolution/revo2.htm</a>
Posted by twotall610 (53 comments )
Reply Link Flag
Not exactly.
The battle then was taxation without representation. Today, we have representation. Let your congressmen and representatives know your feelings. They are there to represent you. Speak loudly and speak often.
Posted by FlappingCrane (19 comments )
Link Flag
Just tax the air we breathe
I take like a few thousand breaths of air everyday. Want to tax that?
Posted by markjowett (4 comments )
Reply Link Flag
well, at some point...
All the air we breathe will need to be filtered and purified by a tax-
funded government organization or a for-profit corporation.
Wouldn't surprise me if one way or another, every breath eventually
costs us.
Posted by celluloid3119 (6 comments )
Link Flag
You're gonna pay a CO2 tax!
It's coming, thanks to the idiotic propaganda from Al Gore and his lying his a** off movie.
Posted by extinctone (214 comments )
Link Flag
It's always schools and police,
Everytime the government has trouble getting new tax bills pass, they threaten us by saying schools and police will loss out. I say who gives a damn then. Where does all my income taxes, property taxes, car taxes, gas taxes, sales taxes and all the other taxes go then?

I'm tired of the government lies and saying schools and police will loss. Remember in California when the car taxes were rolled back. All those ads that police and fire would be threated? Yeah. Seems to me those government entities are still operating.
Posted by bobby_brady (765 comments )
Reply Link Flag
And
if the schools or police were worth a sh**, then they might get some backing. As it is now, we are taxed silly for a police state with a **** poor educational system.
Posted by suyts (824 comments )
Link Flag
Its real simple.
It doesn't matter who you write. Folks we have an unresponsive gov. consisting of one party wearing two kinds of funny hats - demos and repubs. They are the same - professional parasites/politicians. There arrogance is at record levels. You can do what you like, but come election day I won't vote for a candidate from either party who is pro-internet tax or who has supported the Iraq debacle. Actually, I probably won't vote for anyone associated with either party. I truly hope there will be some competent independents to receive my votes. Its time for a major house cleaning and at least thinning of these career dead beats and their shills.
Posted by duggerdm (103 comments )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.