October 17, 2007
For Immediate Release
IN CASE YOU MISSED IT... Fred Thompson: Keep the Internet Tax-Free
Article From: "Keep the Internet Tax-Free "
By Fred Thompson
October 17, 2007
This year, Halloween could be a bit more hair-raising for American consumers, especially if they have an Internet connection.
October 31st is the last day Congress can act to extend or make permanent the Internet Tax Moratorium. If Congress chooses to do nothing (not always a bad thing in my view), the tax moratorium will expire and on November 1st, state and local jurisdictions would be allowed to impose taxes on broadband and Internet access. This would also represent the first major tax increase on consumers in almost eight years.
There are about 15,000 different taxing jurisdictions, so American consumers face the prospect of paying new taxes on everything from email to instant messaging and video downloads to spam or junk e-mail filters. With more than 65 million household broadband connections we're looking at more than $3 billion in new taxes if the Internet Tax Moratorium expires at the end of October.
On three different occasions -1998, 2001and 2005 - Congress made a commitment to keep the Internet tax-free. We did so for a couple of different reasons. First, high-speed broadband was just beginning to emerge, and we felt that the best way to encourage this important technology for education, communication, and economic opportunity, was to not weigh it down with taxes and fees that would put broadband out of reach of many consumers, including schools and libraries.
Second, the Internet and broadband are not limited by geographic borders; they are global networks. Putting taxes on a connection that is so interconnected in the U.S. and elsewhere seemed too unwieldy.
The decision to keep the Internet tax free would seem to have been a good one. High speed broadband connections - the type that have allowed people to watch videos online or to quickly download music or games or to make inexpensive Voice over Internet Protocal calls - are now available in some form to just about everyone in the United States, whether at home, work, school or wireless hot spots in coffee shops and popular public shopping areas.
On a month to month basis, perhaps we're not talking about what would seem to be a lot of money. But like every other tax or fee imposed by government, it all adds up. Good examples of what might lie ahead for consumers can be found on our wireless phone bills. Recently, economists Thomas M. Lenard and Brent D. Mast released a report through the libertarian Progress and Freedom Foundation that showed most cell phone users' paid out about $7 a month in federal, state and local taxes.
That's more than people pay in cigarette or liquor taxes, and I don't think we need to be taxing broadband like it was a sin or a luxury. Congress should make permanent the tax moratorium on the Internet, or, at a minimum, extend it.
Fred Thompson, a former U.S. Senator from Tennessee, is a candidate for the Republican presidential nomination.
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