Broadband Tax Proposal

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Broadband Tax Proposal

Rich Tehrani proposes a broadband tax and then explains why:

Broadband Tax: Why I Am For It

Rich's idea is intriguing - have a flat tax on broadband that takes care of everything else. That is to say, this "all in one tax" means no extra tax on VoIP calls or any other Internet-related taxes now or in the future.

However, anytime I hear someone propose a new tax, as nobel as the idea may seem, I still have to squirm in my chair. Most people are loathe to think of any new tax, but especially when it comes to something so ubiquitous as the Internet.

The Internet has indeed become like a "utility" - similar to electricity, cable TV, or phone service. As such, anytime these "regulated" utilities propose a rate hike, (especially electrical rate hikes) inevitably there is an immediate consumer backlash.

I cannot imagine the backlash that would occur should a broadband Net tax be imposed.

There are other factors to consider as well. What about ISPs, large companies, or other facilities with high-speed T1/T3 data lines? Do they have to pay a Net tax as well? or do they get a free pass? And what about dial-up? Sure, VoIP over dial-up isn't the greatest, but that too bypasses the traditional PSTN with no tax revenue collected by Uncle Sam.

And what about other PSTN bypasses? Satellite phones, cell phones, etc. What about CB radios or high-powered walkie-talkies? Should we tax these too because they have impacted the tax revenue collected by the government?

As much as I would like to believe that VoIP has impacted the U.S. government's tax coffers, I believe it has more to do with flat-rate cell phone service with a bucket of minutes than it does VoIP. Over the past several years people have been paying less in their monthly phone bills (and hence less taxes) because they get a big bucket of cell phone minutes for a low monthly fee.

Anytime the government sticks its hand out looking for a new tax source, I am always a bit wary. Besides, didn't President George Bush campaign on "simplifying" the tax code this year?

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