Senate Mulls Permanent Internet Tax Ban

the debate:

allen's bill -- permanent ban on access taxes
mccain's bill -- 4 year moratorium

the last moratorium ended 6 months ago.

PROBLEM: 10 states have charged internet taxes, will lose substantial revenue

First, these taxes are new. these 10 states [whoever they are] have only had these taxes in place since 1998. before then, the states had to raise revenue in other ways [eek! personal income taxes and sales taxes]

Second, in allen's bill, there is a 3 year grandfather clause -- they would have 3 years how to figure out where to get another source of revenue. I'm not sure what mccain's bill has to say on the matter, but I'm sure the moratorium would be immediate, because the "ban" is for only 4 years.

Issue: is it constitutional to tell the states what they may or may not tax? sure looks like congress can regulate under the interstate commerce clause, access to the internet is a channel or instrumentality. so I have no problem there.

For me, much would depend on who the 10 states are. Is it reasonable to think that they will find a better source of revenue? Will the lack of funds create an economic disaster?

but I personally believe that broadband access should be free of taxes. perhaps only here, bush and I agree.

but bush's motives are to please big business, the telecommunications industry to be exact. he can't ban access taxes and support lower income taxes at the same time. a cash-strapped state will have to raise personal income taxes, sales taxes, property taxes, or whatever, in order to provide everyone broadband free of taxes.

the risk I see here is that there is no guaranty that if the access is not taxed that everyone would get access. if the broadband companies pass the taxes on to the consumer, what incentive do they have to give more people access?

it is the consumer who is going to pay, one way or the other -- either through access taxes or some other tax on living. and, there still will be those that cannot afford broadband even if it is tax free.

I support a ban, but not perhaps for the same reasons.

[it reminds me of TV -- it is supposed to be free, and you pay for it by watching commercials. [ah! a legitimate argument for pop up ads 9-}] but cable came along and changed all that -- now, you pay to have the privilege of watching commercials with a few minutes of entertainment in between. or pay simply to get reception. no more free airwaves. you are taxed on your cable bill, so now not only is TV not free, but you get taxed on what you spend to watch it.]

UPDATE:

State #1: Washington

Rev. Code Wash. (ARCW) § 82.04.297 (2004)

§ 82.04.297. Internet services -- Definitions

(1) The provision of internet services is subject to tax under RCW 82.04.290(2) (tax on doing business in WA).

we can always count on WA to have wacky ways of generating tax revenue -- they don't have income tax!

suggestion: maybe WA could adopt a minimal income tax? but oh! no! mr. Bill won't like that. But it sure beats "latte tax" or "internet access tax".