Author Topic: For the Americans and maybe a general discussion topic of interest  (Read 2105 times)

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Before you groan, jump out to your browser and use Google or whatever search engine you prefer and google any or all of the following items:

Internet Tax Freedom Act
Permanent Internet Tax Freedom Act of 2007 (S. 156)
Internet Consumer Protection Act of 2007 (H.R. 1077)
The Permanent Internet Tax Freedom Act of 2007 H.R. 743,

In 1998, Congress passed the Internet Tax Freedom Act, imposing a three-year moratorium on state and local taxes on Internet access. The moratorium came just as some local governments began to extend their telecommunications taxes to Internet access.  State and local governments were preparing to tax Internet access via cable or DSL, as well as certain other Internet services, along with the Internet backbone providers.

Since then Congress has passed multiple extensions of the Internet tax moratorium, the latest of which expires this November. This time around, Congress should make the ban on Internet taxes permanent. Two bills, The Permanent Internet Tax Freedom Act of 2007 (S. 156) The Internet Consumer Protection Act of 2007 (H.R. 1077), would do just that.

State and local Internet access taxes could add 20 percent to 25 percent to the average Internet consumer?s tax burden ? a hike of about $150 per year in the initial phases. That may not sound like much, but it could strand millions of low-income Americans on the wrong side of the digital divide. Additionally, higher Internet charges could hinder small business from gaining access to the technology they need to compete with larger companies. Schools, libraries, and other educational and research institutions with limited budgets would also take a hit.

Supporters of new Internet taxes make the case that Congress? ?Hands Off the Internet? strategy has served its purpose. The Internet is no longer an infant technology, they say. After all, Internet use in the United States has soared from about 36 percent of the population at the end of 1998 to over 70 percent today.

But in the warp-speed world of the Internet, that?s yesterday?s news. America still lags far behind our economic competitors when it comes to wiring homes and businesses with high-speed Internet access or broadband. Even though the Internet was largely invented here (but not by Al Gore!),  America still ranks 16th in the world in terms of broadband deployment, behind countries like South Korea and Japan.

Widespread broadband deployment is the key to unleashing a new round of Internet-driven gains in productivity and entrepreneurial activity. Respected economists estimate that 1.2 million new jobs would be generated by the broadband build-out, enough growth to generate more in taxes than states and localities hope to raise by taxing your Internet access, e-mail, and other online services.

So why not just extend the moratorium for another two years or so? Because making broadband available on a near-universal basis will require billions in private investment by technology companies willing to build next generation networks like fiber-to-the-home. And companies are hesitant to put that capital at risk as long as the tax man keeps lurking right around the corner, always threatening to milk consumers and potentially destroy a good portion of the mass market for broadband.

Members of Congress have a choice to make. They can give the green light to state and local governments to saddle Internet users with myriad new taxes and fees. Or they can lock the tax man away permanently and throw away the key. That should be a pretty easy call.

Contact your U.S. Representative and Senators and let them know how you feel about taxes on Internet usage.

- Thanks to for the bulk of the analysis in the write-up.

Offline Packman

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Isn't there already some gentleman's agreement to collect sales tax per state?


  • Guest

Those are sales taxes on the transactions; this is about a tax on the service.  Right now, the cable company, phone company, etc. can charge for the service but the govt. cannot tax/tariff the service.  For me, it isn't the amount of money so much as the impact on internet access.  We (USA) lost our edge several years ago and many countries have already surpassed our access rate and others are building up momentum to pass us by.  I am sure they will eventually tax it but hope they are held off as long as possible.


Offline Tim

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I didn’t really get it, excuse me. Not that I’m happy to learn about new taxes (taxes are just government racket after all), but this particular one doesn’t seem to be anything that special.

Talking about millions of new jobs and digital era coming. We all heard this just a few years ago -  before “New economy” died in April'2000. You know that NASDAQ is still about 50% less that it used to be in them days? With adjustment for inflation, it’s even worse.

Are South Korea and Japan ahead of the US? All right, let them lead this race, we already were first and what did we get?


  • Guest

Well, to each their own.  Let your elected representatives vote their conscience then. While I am not exactly clear on how the NASDAQ figures into this, perhaps the point was that one measure of the US economy can be interpreted as negative.  Maybe terrorist attacks, a war and even the US slipping on their broadband implementation rates, could factor into that somehow.   The last time the rankings were posted, the US was still rating pretty high on the worldwide standard of living charts (they call it HDI now) though. 

Personally, I enjoy the government's lack of financial involvement in my Voice-Over-IP, unregulated email, entertainment (games, music and shopping), incredible access to worldwide resources, and text messaging through the internet.  In the last year and a half, I have received hundreds of emails from friends and family back in the states as well as enjoyed dozens of international voice conversations ranging up to 2 hours in length, all without a penny of tax or tariff.  A large portion of my entertainment is internet-based these days and I know of quite a few examples where the internet is changing business processes as well as the social interactions of families and individuals. Even before moving here I cannot recall the last personal letter I received via the Postal Service.  Maybe it was a birthday card from someone who didn't know my email.....

Sure, it?s ?just another tax,? but maybe we have enough of those and this one should be regarded as an investment in our future rather than a revenue source for the pork barrel crowd.