An email I recieved this morning – please click through to email your Congressional representation:
While taxes may be one of life’s certainties, the internet has, so far, miraculously managed to escape the clutches of revenue-hungry government tax collectors. That may change if Congress doesn’t get its act together – and fast.
Back in 1998, when I was the House Majority Leader in Congress, we 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 very high telecommunications taxes to internet access. State and local governments want to tax your cable modem or DSL bill, as well as internet services, and the internet backbone, but our bill stopped them cold. Our goal was simple: encourage the spread of the internet by preventing government from strangling it in its crib with high taxes.
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, S. 156 in the Senate and H.R. 743 in the House, would do just that, but movement thus far has been stagnant and the clock is ticking.
State and local internet access taxes could add 20 percent to 25 percent to the average internet consumer’s bill – a tax hike of about $150 per year. That may not sound like much in Washington, D.C., but it could strand millions of low-income Americans on the wrong side of the digital divide. And 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 your email. Thanks in advance for taking action!
Sincerely,
Dick Armey
Chairman
FreedomWorks.org
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