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Internet Service Tax Moritorium Set To Expire

kdawson posted more than 6 years ago | from the one-of-two-things-we-have-always-with-us dept.

The Almighty Buck 163

nelsonjs writes "On November 1, the ban on taxing Internet service is set to expire. The ban was originally implemented in 1998 in order to encourage the proliferation of Net access. The Senate is considering two competing bills to extend the ban: one would extend it for four years and the other would make the ban permanent. Verizon and Google, usually to be found on opposite sides of any question of Net access, are united in lobbying for the permanent tax ban. If neither passes by November 1, prices for Internet service nationwide could jump by as much as 17 percent, according to ISPs."

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163 comments

Back to 'normal' (-1, Offtopic)

pipatron (966506) | more than 6 years ago | (#20753895)

So you mean that they will have to pay normal taxes just like their competitors? Except they can still keep prices lower because they don't need as many employees? Sounds like a fair deal to me.

Re:Back to 'normal' (-1, Offtopic)

pipatron (966506) | more than 6 years ago | (#20753911)

Damn. Mod me down guys, I should have RTFA first. My post had nothing to do with the subject discussed in this article.

Re:Back to 'normal' (4, Funny)

l4m3z0r (799504) | more than 6 years ago | (#20754827)

They modded you "offtopic" because mod "stupid" is not available.

Double Dipping (1, Funny)

name*censored* (884880) | more than 6 years ago | (#20753897)

They can't tax the internet - that's double dipping! Isn't porn ALREADY taxed?

Re:Double Dipping (2, Insightful)

PlatyPaul (690601) | more than 6 years ago | (#20753963)

Strangely enough, you could argue that it may be [nolo.com] (FYI, this [cornell.edu] is the cited precedent for most anti-tax situations). If you made a purchase for which sales tax would be applicable within your home state, and sales tax isn't included in the cost, then you may be responsible for declaring the purchase to the state and paying the tax accordingly.

This all assumes that you actually paid for that porn in the first place, though.

Re:Double Dipping (0)

Anonymous Coward | more than 6 years ago | (#20754029)

Some established porn, like Playboy, is already taxed under existing law, but these laws do not apply to more modern porn, such as Hot Coed Teens Going Crazy and Watch Hidden Dressing Room Cam.

You guys can do better than this... (-1)

Anonymous Coward | more than 6 years ago | (#20754139)

Come on /.ers, it's been ages since I've seen a good "greased Yoda doll up my ass" post. You can do better than that!

that's mor-A-torium (4, Informative)

Anonymous Coward | more than 6 years ago | (#20753899)

n/t

Re:that's mor-A-torium (0)

Anonymous Coward | more than 6 years ago | (#20755493)

is it, defin-A-tely?

This comes up periodically... (5, Insightful)

Algorithmnast (1105517) | more than 6 years ago | (#20753905)

The politicians are unlikely to make the ban (on the tax) permanent - each time the ban is about to expire, they get to look good to their constituents without actually doing anything.

So it'll get extended... again... and then in N years we'll hear another net-centric story propagated by a media wanting our avid attention for politicians who want our unconditional vote.

Move Along.... nothing to really see here...

Don't be so sure... (1, Insightful)

Anonymous Coward | more than 6 years ago | (#20753969)

This time around, we have a Democrat-controlled House and Senate.

My guess? We're about to see Dem's true colors shine through: TAX IT!

And of course, the people cheering this on are going to be the same ones who want to put health-care decisions for the entire US in the hands of the same government that brought us the TSA. :-P

Re:Don't be so sure... (3, Insightful)

smooth wombat (796938) | more than 6 years ago | (#20754011)

And of course, the people cheering this on are going to be the same ones who want to put health-care decisions for the entire US in the hands of the same government that brought us the TSA.


So you're saying that Mitt Romney will be the next president? You remember Mitt, don't you? The Republican who forced the entire population of Massachusetts to buy health insurance or pay a fine, starting with confiscating any tax refund you may get.

You do mean the Republicans, don't you?

Re:Don't be so sure... (2, Insightful)

Anonymous Coward | more than 6 years ago | (#20754045)

"So you're saying that Mitt Romney will be the next president? You remember Mitt, don't you? The Republican who forced the entire population of Massachusetts to buy health insurance or pay a fine, starting with confiscating any tax refund you may get."

Not sure why this is flame bait, he just pointing out that both sides of the political spectrum have had quacks with horrible ideas (even if they were well meaning). Imho, the only difference in Reps and Dems are the tie colors - both sides have smart people and corrupt/stupid people.

Re:Don't be so sure... (1)

smooth wombat (796938) | more than 6 years ago | (#20754589)

Of course it's flamebait. 'Fair and Balanced' means pointing out only the wacky, socialist ideas that Democrats have, never the same socialist ideas that Republicans have and have implemented.

And let's not get into the whole "smaller government" thing that Republicans continually tout. That would be heresy to point out the HUGE government expansion the Republicans have done, not to mention the Big Brother-esque, all-knowing-all-seeing spying programs.

Re:Don't be so sure... (2, Insightful)

djasbestos (1035410) | more than 6 years ago | (#20755561)

Hence why partisanship is crap, considering the rifts in the Democratic party and more notably the Republican party. I think "small government" Republicans are at best 1:1 with neocons and religious fanatics (when they aren't one and the same). Then you've got Kucinich and Dodd in the same party where the Dems are concerned.

Moral of the story: America, ALWAYS vote on the issues, NEVER based on the letter next to someone's name.

Re:Don't be so sure... (3, Insightful)

Anonymous Coward | more than 6 years ago | (#20754121)

[OT]

That is true. Whereas the Republicans just want to spend it, without taxing it in the first place.

The cost just gets passed on to the next (current) generation. Thanks a bunch, not. Hey, I know, we'll just liquidate and cancel Social Security and cut off Medic[aid/are] to anyone over 65. Carry on.

Re:Don't be so sure... (1)

kalirion (728907) | more than 6 years ago | (#20754697)

It's just like credit cards - free money!

Re:Don't be so sure... (2, Insightful)

Dunbal (464142) | more than 6 years ago | (#20754149)

We're about to see Dem's true colors shine through: TAX IT!

      Yes, especially since the original bill was passed under Bill Clinton's presidency. Oh, good old Bill such a republican, wasn't he?

      Sigh. Yes I am being sarcastic.

Re:Don't be so sure... (1, Informative)

Anonymous Coward | more than 6 years ago | (#20754487)

I hope you arn't an American, because if you are then you need to take a remedial civics class.
Bills come out of the House and Senate. Congress makes the laws, Congress passes the laws, and in 1997 Congress was controlled by the Republicans.

As far as real powers go a President can't make a bill become law (they can possibly prevent it).

Re:Don't be so sure... (0)

Anonymous Coward | more than 6 years ago | (#20755289)

And it sounds like everything you know about American politics came from civics class. Yes, the President cannot introduce bills for debate, but he can certainly get bills introduced. Also, the Republicans didn't have a 2/3 majority in both houses, so a veto would have at least been possible if this were a pure R v. D conflict.

Re:Don't be so sure... (1)

Dunbal (464142) | more than 6 years ago | (#20755495)

an American, because if you are then you need to take a remedial civics class.

No, I'm not American. And yes I know the difference between the legislative and executive branches. However your presidents have veto power and they DO use it. The fact that Clinton did not veto the bill that established a moratorium on internet tax shows that he wasn't against it. In fact, he supported it at the time, since he was all for anything that "built" the internet. And since he was a democrat, I refute the argument of the original poster.

Non-Americans also pay attention to US politics because (unfortunately) they affect the world. Sometimes disastrously, as GWB has so poingantly demonstrated.

Re:Don't be so sure... (0)

Anonymous Coward | more than 6 years ago | (#20755941)

In fact, he supported it at the time, since he was all for anything that "built" the internet. And since he was a democrat, I refute the argument of the original poster.

You refute nothing.

Just because one Democrat almost 15 years ago signed a Republican bill that prevented taxation of the internet does not mean that a Democratic Congress today won't decline to extend that ban.

Clinton was a better Republican than Bush (2, Interesting)

tjstork (137384) | more than 6 years ago | (#20754997)

Yes, especially since the original bill was passed under Bill Clinton's presidency. Oh, good old Bill such a republican, wasn't he?
            Sigh. Yes I am being sarcastic.


Fiscally, the only thing that Bush has done that could be considered Republican was to lower the capital gains tax. However, Clinton himself lowered the capital gains tax, but also kept spending in check, balanced the budget, promoted a sound dollar. If Hillary would actually be as good fiscally as her husband was, I'd say the budget would be in pretty good shape.

On the other hand, Bush is afflicted with LBJ syndrome. He's spends more than a drunk in a whorehouse.

Re:Clinton was a better Republican than Bush (1)

Ajehals (947354) | more than 6 years ago | (#20755901)

Assuming yo are correct the situation would end up being something like this;

Currently the US is in a bit of a financial mess, taxes need to be raised and spending cut to deal with it, the dollar needs to be stabilised and inflationary pressures reduced. To do these things will harm the economy and increase the real cost of living *and* the tax burden, so you do that for 4 years, US finances look OK again but the voters will hate it. So after 4/8 years of hard work and belt tightening they will vote for the 'other' lot, because they would like to slacken their belts and pay less tax. So basically if the Democrats came in and repaired the damage done to the US economy and government budget, then they will be seen as a party of high taxation and economic downturn, the Republicans will point this out and promise to fix it, they will use the gains achieved and then squander the long term benefits for short term popularity and in another 4/8 years you will need someone to come in and do the unpopular fixing again. I wish I had a job where I could *always* blame the last incumbent, or even the last incumbent I didn't like, for the issues I have to face, and get away with it.

I should say that the words Democrat and Republican can be used interchangeably in the above, if I were allowed to I wouldn't vote for either, two party states, especially those where a politically motivated and elected individual has the power of veto don't provide real choice, nor do they promote long term policy or policies that are unpopular.

Re:This comes up periodically... (1)

infonography (566403) | more than 6 years ago | (#20754007)

It has to come up periodically otherwise the lobbyists wouldn't have anything to do with all that money but buy mansions in Tuscany. Still one can never have too many mansions think what the poor mansion builders of tuscany would do without the support of American lobbyists.

So join me brothers and sisters and help save the Gnomes of Zürich!

Re:This comes up periodically... (1)

CrimsonAvenger (580665) | more than 6 years ago | (#20755625)

The politicians are unlikely to make the ban (on the tax) permanent

The politicians CANNOT make the ban (on the tax) permanent. Any law automatically supersedes any previously written laws on a given issue, given proper jurisdiction (States cannot override Federal laws, though the Feds CAN override State laws).

Theoretically, they could ban internet taxes forever tomorrow. And the day after tomorrow, impose a $1/bit tax on internet traffic. And, lo! There would be a $1/bit tax on the internet. Until a new law was written.

Note that that means even an extension doesn't mean quite what you might think. If they extend the ban for five years, and three years from now, they "revisit" the issue, the ban can be ignored in favour of a tax, in spite of the ban saying that the internet can't be taxed.

On the other hand, the ban DOES prevent lesser jurisdictions from taxing the internet. Which is pretty much the intent of the ban. But don't make the mistake of thinking that the internet can't be taxed if a permanent ban is passed. It just means it can't be taxed until Congress decides it's in Congress's interest to tax the internet.

Re:This comes up periodically... (2, Funny)

TheVelvetFlamebait (986083) | more than 6 years ago | (#20755747)

This comes up periodically. The whiners are unlikely to do anything about the political environment. Each time a politician doesn't do exactly what they want to do, no matter the effort or cost, the whiners get to look good to their peers without actually doing anything. So social problems get extended... again... and then in N minutes, another whiny comment propagated by an irrational hatred for authority and media sites who want our unconditional patronage.

Move along... nothing to really see here...

Re:This comes up periodically... (1)

dashg (1161533) | more than 6 years ago | (#20756295)

I agree. Politicians will not make the ban permanent. They have already extended it twice before and will do so again. They want to show the voters that they are actually doing something every 4 or so years, so when it comes up for expiration again down the line, we can go through this story again and politicians will get more publicity once again.
The more publicity means more votes
 

Misnomer (2, Informative)

MyLongNickName (822545) | more than 6 years ago | (#20753907)

They can pass a bill to make the non-tax "Permanent", but it only takes another bill to tax it again. The only upside to passing the bill would be to create a bit of legislative inertia.

Extend it...DUH! (2, Insightful)

DarkNemesis618 (908703) | more than 6 years ago | (#20753909)

I hope the ban is extended. I'd prefer permanently, but I'd be content with a 4 year extension...for 4 years anyway. If it's not the internet is gonna become just like cell phones. Sign up for a $40/month plan and end up paying $55 after all the taxes. C'mon congress!

If you think RMS's face is hairy... (0)

Anonymous Coward | more than 6 years ago | (#20754047)

you should see ME!

Cheers,
RMS's Balls

Re:If you think RMS's face is hairy... (0)

Anonymous Coward | more than 6 years ago | (#20754203)

No part of RMS can possibly compete with my fearsome nose hair.

Re:If you think RMS's face is hairy... (0)

Anonymous Coward | more than 6 years ago | (#20754373)

I see your nose hair and you raise you my grandmother's mustache.

Re:Extend it...DUH! (1)

Colin Smith (2679) | more than 6 years ago | (#20754049)

Stop complaining, you voted for it. 99% of Americans voted for high tax parties.
 

Re:Extend it...DUH! (2, Insightful)

bentcd (690786) | more than 6 years ago | (#20754127)

Stop complaining, you voted for it. 99% of Americans voted for high tax parties.
Does this include the ~45% of Americans that didn't actually bother to vote?

Re:Extend it...DUH! (2, Insightful)

Colin Smith (2679) | more than 6 years ago | (#20754253)

Well they clearly don't care so why would anyone else care what they think?
 

Re:Extend it...DUH! (0)

Anonymous Coward | more than 6 years ago | (#20754335)

Well they clearly don't care so why would anyone else care what they think?

Or possibly they care a great deal but despair because the US electoral system effectively locks them out of any choice except two parties who will both continue the current corrupt system?

Re:Extend it...DUH! (1)

SatanicPuppy (611928) | more than 6 years ago | (#20754481)

The number of people who don't vote outnumber the number of people who vote for either party. If they united behind a candidate and got up off their asses, they could have it all their own way.

Re:Extend it...DUH! (1)

bentcd (690786) | more than 6 years ago | (#20755167)

Well they clearly don't care so why would anyone else care what they think?
True, true. Why should anyone care about a demographic that in 1996 was only a majority of US voters. Democracy is just sooo 20th century :-)

What I am trying to get at is that whenever I see assertions of the kind "80% of Americans voted for . . ." it just screams out at me because the /truth/ is "80% of the Americans /that voted/ voted for . . ." and the difference is really very important.

As an example, the current president is probably lucky if he can /actually/ boast more than 20% public support back on election day if you take voter turnout and the disenfranchised into account (this isn't an attempt at Bush-bashing btw, previous presidents suffered from the same). Everything else is just spin. This fact needs to be taken into account whenever a president's (or other elected official's) legitimacy is to be considered. Is a president with only 20% of /actual/ Americans behind him really to be allowed to go to war on behalf of his country? Is a Congress faction with less than 40% of /actual/ Americans behind it really to be allowed to amend the Constitution?

Re:Extend it...DUH! (1)

Phisbut (761268) | more than 6 years ago | (#20754349)

Does this include the ~45% of Americans that didn't actually bother to vote?

Yes, because many people consider voting to not be a right but a responsibility, and the "right to vote" is tied to the "right to complain". If you didn't vote, shut up and swallow the pill.

Re:Extend it...DUH! (0)

Anonymous Coward | more than 6 years ago | (#20754493)

You can choose between hanging, stoning, or decapitation. If you dont chose, you cant complain about being executed.

Re:Extend it...DUH! (1)

oyenstikker (536040) | more than 6 years ago | (#20755059)

I moved to a new county fewer than 30 days before the 2006 elections and promptly registered to vote in my new county. Thus, by law, I was not able to vote anywhere. Does that mean I am not allowed to complain?

tax the rich? (0, Offtopic)

p51d007 (656414) | more than 6 years ago | (#20754207)

You mean the party in power will end up taxing "the poor" (whoever they are) I can't believe the democrats (or republicans for that matter) would lie about such things? Idiots.......that's what politicians must think of us, and to a degree they are right. We keep putting the same dumbasses back in DC, to the tune of a 90+ reelection rate. Until we (the people) get fed up with these "lifetime" politicians, kick their sorry asses out, kill off the K street lobbyists, it will never change.

Re:Extend it...DUH! (1)

suv4x4 (956391) | more than 6 years ago | (#20754159)

I hope the ban is extended. I'd prefer permanently, but I'd be content with a 4 year extension...for 4 years anyway. If it's not the internet is gonna become just like cell phones. Sign up for a $40/month plan and end up paying $55 after all the taxes. C'mon congress!

In EU we pay VAT on services and products, so we do sign up for $40/month plan and pay $55 after the taxes. But somehow our Internet is still faster and cheaper than the US one.

Internet tax definitely won't ruin teh Internet. The question is rather: why on Earth tax it in the first place.

Re:Extend it...DUH! (2, Interesting)

absoluteflatness (913952) | more than 6 years ago | (#20755159)

Internet tax definitely won't ruin teh Internet. The question is rather: why on Earth tax it in the first place.

Well why tax anything? Why tax income, or sales, or gasoline, or any of the other million categories of items that are taxed? The bottom line is, the government needs money, and it's probably a lot easier to get it by nickel-and-diming people with taxes on everything they pay for than by raising income taxes or some other high-profile tax. Of course this simplistically assumes that all tax revenue just goes into a big pile to be used for anything, but...

Also, in response to the other part of your post, I thought that the main complaint about Internet access in Europe was higher prices. I'm spoiled by being on the edge of an urban area, where I get 10Mb "unlimited" broadband for $25 a month. I know many areas of the country can't get broadband at all, or just super-expensive options from only one provider, but claiming that the Internet is faster and cheaper in Europe than the US is a claim I'd need some numbers to back up before I believed it. On average you might have us beat, but I think our best options probably match up pretty well.

Re:Extend it...DUH! (1)

suv4x4 (956391) | more than 6 years ago | (#20755547)

Well why tax anything? Why tax income, or sales, or gasoline, or any of the other million categories of items that are taxed? The bottom line is, the government needs money, and it's probably a lot easier to get it by nickel-and-diming people with taxes on everything they pay for than by raising income taxes or some other high-profile tax. Of course this simplistically assumes that all tax revenue just goes into a big pile to be used for anything, but...

Maybe you don't understand my intention. If you tax all of this above you mentioned, the internet is already implicitly taxed.

One would think taxing corporate and private income once is sufficient. The complication of taxes is just a way to hide how big taxes are in fact.

Taking 60% of your income? Outrageous! But split those 50% in various insurances and other tax types, and there we go.

Re:Extend it...DUH! (1)

absoluteflatness (913952) | more than 6 years ago | (#20756149)

If you tax all of this above you mentioned, the internet is already implicitly taxed. .... The complication of taxes is just a way to hide how big taxes are in fact

Well, the point of my post was, originally anyway, to say basically the same thing, that many small individual taxes are easier to get done.

Of course, by your logic, everything is already implicitly taxed, since income is. Which, in a way is very much true. I've always hated the political objection to some taxes as "taxing money twice". All money is taxed at least twice, pretty much, once it's spent, barring charitable donations or tax loopholes (or Delaware). Most money gets taxed more, with capital gains and interest taxes, inheritance taxes, etc. Ever since income tax was instituted, we've been taxing people multiple times over. Why stop now?

Moritorium? (0, Offtopic)

edittard (805475) | more than 6 years ago | (#20753921)

My oh my, the editing around here is certainly morabund.

Re:Moritorium? (1)

Moderatbastard (808662) | more than 6 years ago | (#20755589)

Note to moderators:

Offtopic means neither a joke you didn't get, nor containg a word you don't know the meaning of.

Kthxbye.

Spellcheck, please. (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#20753925)

Moratorium.

Unfair taxing (2, Insightful)

packetmon (977047) | more than 6 years ago | (#20753961)

You know, this is insanely stupid bill. Let's take two people, Farmer Joe in Oregon and City Jake in New York City. Farmer Joe has Internet access for mundane tasks and will usually go online maybe 3 times a month to check weather stats, maybe check out the prices on Cattle feed. For his access he pays say 20.00 a month. City Jake in New York City - to make a long story short - lives online spending in excess of 12 hours daily. He pays 20.00 a month. Why should Farmer Joe now have to pay an Internet tax if he should, why should it be more than City Jakes taxes. What I can see happening is less usage over time as consumers will be less likely inclined to pay high fees for what is almost always in the home segment iffy service at best (how many times has your cable provider went down... DSL had issues). If this should happen it would mean less consumer spending throughout the country and world (why should I spend a 17% tax when I can walk to the mall). Politicians are just plain e-stupid

Re:Unfair taxing (1)

Aladrin (926209) | more than 6 years ago | (#20754299)

Might as well ask why he has to pay the same $20 in the first place. We -used- to have usage-based fees on our internet access, but the overwhelming majority of the market demanded unlimited access for a set cost. Now you'd like to go back to usage-based cost.

Your example is poor, anyhow, since City Jake doesn't have $20/month access, he has $50/month because he prefers the speed. His livelihood is based on the net (or he couldn't afford to spend 12 hours a day on it) and if he used a slower line, he'd spend more time than he has to. So now we've got Farmer Joe for $20/month and City Jake for $50/month, and appropriate taxes on each. Sounds pretty fair to me, considering their usage of the service.

And 17% higher than 'current fees' is not 'high fees'. It's a little more, but not enough that most people will care. Some will choose a lower speed line, some will choose to drop internet altogether... But the majority will change nothing.

As for the mall... What does that have to do with anything? How is walking to the mall a substitute for the internet? Sure, you can talk to people there, but that's like saying you'll just play games on your cellphone because a Nintendo DS costs too much. I'm sure -someone- has said it, but the overwhelming majority think that person is more than a little off.

Re:Unfair taxing (1)

Metasquares (555685) | more than 6 years ago | (#20754301)

Jake is actually easier to provide access to than Joe, living in a very dense urban area where millions of customers can offset the cost of laying fiber. I don't know whether this offsets the cost of his increased access, but it is something to consider in your example.

Farmer Joe's Daughter (1)

EgoWumpus (638704) | more than 6 years ago | (#20755249)

First of all, 'Farmer Joe' should pay more, because it's harder per capita to get access feeds to him than to 'City Jake'. Secondly, who are we kidding? Farmer Joe's teenage daughter is *so* on Myspace 24/7, if you know what I mean. I bet you'll see that, as with house sizes, you tend to fill up the space you have, rather than get the space you need. If Farmer Joe is paying for a highspeed connection, chances are he's using it within an order of magnitude of 'City Jake'. But on the other end of that axis; City Jake isn't on it twelve hours a day. If you live in a city, you don't stay in your house all day - it's too expensive. Housing in cities are at a premium because they're close to things to do - so you tend to do them. City Jake is getting his 'live feed' on.

No, the actual heaviest users are probably the suburbs - where most people live anyway - and businesses. Suburbs because you're too far from anywhere interesting to go there, and yet can get all your amenities delivered to you, and businesses because it's an essential service these days, like having a telephone. I don't particularly have a problem taxing businesses, because so much government infrastructure is built to support them exclusively. But for that reason it's unlikely - look at Google and Verizon, in this case. I'm sure no dot com or computer manufacturer is thrilled either. I bet the Wall Street types aren't going to be thrilled that their uber-fast up-to-the-phemto-second T1000 line is being taxed, either.

In short, I don't think this is a problem of politicians being stupid. (And I'll refrain from commenting on your 'e-quip' (-pedness to pass judgment.)) This ban was placed to encourage use - it's been encouraged. The government would be within it's rights to tax it - as much as it ever is, anyway.

There is a case for it, too; the government needs money, badly. We are loaned one billion dollars a day by other countries, and our dollar is tanking as a result. We'll be paying higher costs on these things anyway if we don't get that under control. But I think it would be a poorly targeted tax; we want to encourage internet commerce because we're strong in it. We want to discourage oil use because we do it too much, and it's costing us untold money - and arguably lives. The reason not to pass the tax is because, needing to be hobbled, it's best to hobble the economy in an area where we can afford to be less competitive.

Re:Unfair taxing (1)

Red Flayer (890720) | more than 6 years ago | (#20755259)

Why should Farmer Joe now have to pay an Internet tax if he should, why should it be more than City Jakes taxes
Perhaps because it's more expensive to provide that internet service to Joe?

Perhaps because the net benefit to society of cheaper access for urban consumers is greater than the benefit of cheaper access for rural consumers?

Many 'economic development zones' have a reduced tax burden to encourage businesses to move there. Why should it be any different for residential zones where development is wanted in preference to other areas?

It is more efficient to provide most services in urban areas rather than rural, plus there is the value of retaining open space. I'm in favor of tax incentives for people to live in urban areas. I'm willing to pay a surcharge to live in a less-populated area (which I do, by paying higher property taxes, and by paying more for my property).

At any rate, I digress. What I wanted to address was that the taxation is upon the cash transaction, not on the services provided. It doesn't matter how much Joe or Jake uses their internet service -- what matters is how much they pay for it to the service provider. If Joe wants to pay less tax, he'll need to figure out a way to pay less for his internet service -- it the cost of service that is unfair, not the tax assessed for that service.

Re:Unfair taxing (1)

nomadic (141991) | more than 6 years ago | (#20755269)

Why should Farmer Joe now have to pay an Internet tax if he should, why should it be more than City Jakes taxes.

Seems fair, since City Jake is heavily subsidizing Farmer Joe through his taxes.

Yes, but when does the modem tax kick in? (0)

Anonymous Coward | more than 6 years ago | (#20753967)

I've been waiting for 20+ years for the modem tax to kick in... I demand my legislators do something! I want more taxes!

No special deal for internet companies (1, Interesting)

140Mandak262Jamuna (970587) | more than 6 years ago | (#20753989)

If you want lower taxes, fight for lower taxes across the board. There is no reason to tax the brick and mortar establishments and give a blank check to the internet companies.

Why should the mom-and-pop diner that ekes out a living by selling coffee and donuts be forced to comply with the onerous burden of collecting and remitting taxes on every cup of joe they sell while the multi-billion dollar sale companies like Amazon get a free ride?

Long time ago it was considered too difficult for small internet start ups to follow the complex local taxes and exempt categories for all the 25,000 taxing jurisdictions in the country. That argument is no longer valid. The internet companies should be able to calculate the local tax and exempt categories based on the deliver address. Or they can float an internet startup to provide the service to other companies.

Fight for lower taxes across the board, fight for better spending efficiency by the government. Slashdot readers are tech savvy people who can avoid sales taxes by ordering online. If you fight to keep the special treatment of internet companies over brick-and-mortar companies, you are no better than the vested special interests that you often criticize.

Re:No special deal for internet companies (2, Informative)

faloi (738831) | more than 6 years ago | (#20754015)

If you fight to keep the special treatment of internet companies over brick-and-mortar companies, you are no better than the vested special interests that you often criticize.

A valid point, perhaps. Except that the article is in regards to additional taxes put on Internet services, and has nothing to do with taxing goods sold across the Internet. This is, essentially, an effort to hold down any additional fees that might be assessed for Internet access. Similar to keeping all the odd state and federal fees off a phone bill.

It's got nothing to do with interstate online commerce.

Re:No special deal for internet companies (1)

140Mandak262Jamuna (970587) | more than 6 years ago | (#20754421)

yes, I realized after posting. Will be eating crow for lunch today.

Re:No special deal for internet companies (2, Insightful)

TinBromide (921574) | more than 6 years ago | (#20754091)

The websites and the brick and mortar shops both have to pay local state sales tax, provided that the customer is in the same state as the website's product point of origin (For a service, its the main/local office that determines if you pay sales). Thats why newegg customers have to pay tax in NJ and a few other states, they ship products from there. That's to prevent the diner from setting up a web kiosk to order coffee and allowing the waitresses to be merely couriers of the product ordered over the web.

I think you might have conventional sales tax confused with what this article is talking about. Unless the mom and pop diner opened up web service that would then be subject to the tax, they would actually end up with ~%11 savings over a taxed website.

Either that or it has to deal with ISP "service". I didn't read the article, the summary usually provides enough entertainment.

Re:No special deal for internet companies (2, Informative)

rawtatoor (560209) | more than 6 years ago | (#20756323)

And as it turns out, there is a reason that you don't have to pay taxes for goods from another state.

Not that something like The Constitution of the United States of America has really mattered in reality for a long time, but I quote:

"No Tax or Duty shall be laid on Articles exported from any State."
(Art 1, Sec 9, clause 5)

So, no it doesn't really have anything to do with supporting anybody over anybody else, just respect for the law.

Re:No special deal for internet companies (1)

Dunbal (464142) | more than 6 years ago | (#20754131)

If you fight to keep the special treatment of internet companies over brick-and-mortar companies, you are no better than the vested special interests that you often criticize.

      So you suggest that in order to "fight taxes across the board" we should accept a tax on internet services, since everything else is taxed? I have a pastor friend who is looking for help with a new church, and I think we just found the right candidate for the job...

it's the same for EVERYONE (4, Insightful)

ScentCone (795499) | more than 6 years ago | (#20754175)

If you fight to keep the special treatment of internet companies over brick-and-mortar companies, you are no better than the vested special interests that you often criticize.

Yeesh. As has already been pointed out to you, this isn't about sales taxes on the goods that happen to be ordered online. This is about taxing the service you're buying which connects you to the internet. Much like your cable and phone services are already being taxed.

That being said: A small mom-and-pop retailer that takes an order over the phone, or through the mail, or by fax, or off of an auction site, or from their own web site is - JUST LIKE AMAZON - not obligated to collect and remit sales tax if they happen to ship out of state. Conversely, companies like Amazon DO have to collect and remit sales tax if they're shipping into a state where they have a business presence. So, if Amazon operates a warehouse/distribution center in Maryland, then they're on the hook to remit Maryland sales tax on any orders they ship to Maryland addresses.

Very large companies, increasingly, DO have offices, operations, or other "nexus" in more than one state, and are increasingly on the hook to collect such taxes for those state governments. Further, you've got places like California, which has been known to lean on out-of-state retailers to remit CA sales tax whether they have a presence there or not. Their leverage? The tell retailers that if they don't, they'll be blacklisted from any purchasing done by any agency of the CA state government. And while that may not matter to Uncle-Jim's-Fly-Rods-dot-com in Idaho, it definitely matters to retailers that sell office supplies, truck fleet parts, computer hardware, etc. It hits big companies, and the mom-and-pops the same way.

Your example of the diner is a particularly bad one. There is no un-taxed competition shipping competing omlettes and cups of hot coffee in from out of state. If your point is that there are large businesses (in other lines of work) making money by doing business with the residents of a given state, and not collecting sales tax... remember that it's the CONSUMER'S responsibility to pay sales and use taxes on stuff they buy from out of state. Don't like that the sale isn't taxed up front? Don't sweat it... it's the people who live in YOUR state that are then supposed to pay those taxes on the goods they buy from out of state. Otherwise, you've got businesses that aren't even IN your state having to do insane amounts of paperwork with your state government. Some states have sales tax rates that vary by zip code, and which depend on the type of goods being purchased, and which change seasonally. Should every retailer in every state have to keep track of, and remit all of that nonsense to every other state government around the country? Or should your fellow state citizens simply pay up when they buy something big ticket from out of state?

And lastly: how about simply making your state a more attractive place from which to OPERATE a large retailer? That way you get WAY more cash flow into the state coffers... income taxes on the employees, corporate incomes and real-estate taxes, taxes on all of the services and utilities that the company uses in the state, taxes on all of the services and items that the employees consume in that state, taxes on the incomes of all of the third-party vendors and service providers that support the company in your state. What you SHOULD be doing is asking your legislators to find ways to make your local infrastructure and circumstances very attractive to the next Amazon.

Re:No special deal for internet companies (1)

kimvette (919543) | more than 6 years ago | (#20754435)

Why should the mom-and-pop diner that ekes out a living by selling coffee and donuts be forced to comply with the onerous burden of collecting and remitting taxes on every cup of joe they sell while the multi-billion dollar sale companies like Amazon get a free ride?


Amazon does not get a free ride: they have to charge and remit taxes in any state in which they have a physical presence. If you live in say, Nebraska and an Amazon vendor has a physical presence in NE and you purchase from them, you will be charged sales tax.

Likewise, if that mom & pop diner got into selling meals via mail order, they would be collecting sales tax in their local state, any state they have a physical presence in, but would not have to for states in which they do not.

It IS fair when you come down to it.

Re:No special deal for internet companies (1)

vertinox (846076) | more than 6 years ago | (#20754663)

Fight for lower taxes across the board, fight for better spending efficiency by the government. Slashdot readers are tech savvy people who can avoid sales taxes by ordering online. If you fight to keep the special treatment of internet companies over brick-and-mortar companies, you are no better than the vested special interests that you often criticize.

That doesn't make much sense because most brick and mortars have store fronts these days. In reality, if internet companies want to avoid sales tax, they'll incorporate in Delaware or over seas.

Why? (0, Troll)

stranger_to_himself (1132241) | more than 6 years ago | (#20754005)

I can't think why the internet shouldn't be taxed like everything else. Or at least every other public good. If pensioners have to pay tax on their fuel supplies in winter then we should be paying tax on our internet connections.

Re:Why? (5, Informative)

morgan_greywolf (835522) | more than 6 years ago | (#20754075)

You already pay tax on your Internet connection if:

  • You use a dislup, DSL, ISDN or FiOS connection, you are paying into the Universal Service Fund, plus federal, state and local tax on the phone line
  • Your ISP has a business presence in your state (state sales tax)
  • You use a cable connection, you are you paying federal, state, and local tax on cable.
  • You use a mobile broadband network, you are paying federal, state and local tax on cellular service



  • That's pretty much everybody. I didn't include satellite only because I've never had a satellite connection, and therefore I am unfamiliar with whether there are taxes included on that bill.

    Why on earth would you want to pay more tax?

Re:Why? (1, Funny)

Anonymous Coward | more than 6 years ago | (#20754369)

I agree with everything you say, but it's your last point that really sells me.

Re:Why? (1)

stranger_to_himself (1132241) | more than 6 years ago | (#20754489)

Why on earth would you want to pay more tax? middle class guilt?

Re:Why? (2)

morgan_greywolf (835522) | more than 6 years ago | (#20754543)

Don't worry about middle class guilt. If things keep going the way they are, neither you nor i will be middle class anyway.

Re:Why? (1)

fotbr (855184) | more than 6 years ago | (#20754773)

I don't pay tax on my cable internet service.

Of course, thats because the local cable company is HAPPY to sell you cable internet without requiring you to pay for cable tv.

Re:Why? (1)

Dunbal (464142) | more than 6 years ago | (#20754099)

The argument used to be that everyone had dial up back then, so they were paying taxes on their phone line and therefore paying an internet tax on a phone line that was already taxed would amount to a form of "double taxation".

However the situation today is quite different - many people have broadband through ADSL lines, a lot of these people have even gotten rid of their regular phone lines to use VOIP, and are therefore not paying any tax at all on their voice/data communication services (unless they have a cell phone).

Personally I am never in favor of MORE tax - there comes a point where the government has to try make do with what it gets and try to prioritize and budget accordingly instead of finding new and creative ways to squeeze us for more cash. However I guess that the above is an argument that could be put forward in favor of the tax. And of course they could do it for the children... because not supporting new taxes lets the terrorists win.

Re:Why? (0)

Anonymous Coward | more than 6 years ago | (#20755859)

Actually, my voip line IS taxed, due to 911 service fees, and local loop unbundling. Is it much? No, but there are "fees" that are called "taxes" by the local telco.

Re:Why? (1)

stranger_to_himself (1132241) | more than 6 years ago | (#20756155)

Personally I am never in favor of MORE tax - there comes a point where the government has to try make do with what it gets and try to prioritize and budget accordingly instead of finding new and creative ways to squeeze us for more cash. However I guess that the above is an argument that could be put forward in favor of the tax. And of course they could do it for the children... because not supporting new taxes lets the terrorists win.

I agree with this. The government needs a certain amount of money to pay for stuff - quite how much money that should be is another argument. The issue here is who should be paying, how should the money be collected and whether taxes should be used as a way to encourage or discourage certain behaviour.

Re:Why? (1)

Attila Dimedici (1036002) | more than 6 years ago | (#20754243)

If the moratorium ends you will be paying tax on your internet connection to your local township (borough, city), the state and the federal government (that is assuming that the county doesn't dip in for a bite as well). Each of these will be some "reasonable" percentage of the bill, adding up to increase the cost of internet by 1/3 to 1/2 of what you are paying now. Oh btw, when this moratorium was originally passed, there were municipalities and states talking about taxes such as a couple cents on each email. So, it could possibly be more than a my estimates above. Oh yeah, some municipalities were talking about taxing (or trying to)all internet communication that passed through them.

You can't spell. YOU CAN'T SPELL!!! (0)

Anonymous Coward | more than 6 years ago | (#20754013)

Don't post if you can't spell.

Shot in the arm for failed municipal wifi, etc.? (1)

Bearhouse (1034238) | more than 6 years ago | (#20754065)

Could be a boost to the 'failed' attempts at establishing 'free' wifi in urban & other areas, many of which originally intended to help the poor who - as often - were missing out on an important part of modern society.

Also for sites that encourage listing 'free' hotspots and help you with establishing your own. Too many to list here - Google is your friend, (uh, if you're logged out and using Noscript etc.)

Finally, if you're near a border, or have a rich friend that's just a little too far away, you can always try something like this!

http://www.instructables.com/id/Wifi-Signal-Strainer-(WokFi)/ [instructables.com]

There is no such thing as a "free" gov. service (1)

thesandbender (911391) | more than 6 years ago | (#20754525)

How do you think they pay for those "free" services? Through taxes. There is no such thing as a "free" government service. Your Wi-Fi may be "free" but you'll end up paying more at the store, or on your property taxes, etc. Government is supposed to be a zero sum game. If you add something you have to taking something from somewhere else. And honestly, having done contract IT work for State and Federal agencies for almost seven years, I'm not sure I'd want to use a municipal WiFi service (not a knock on all government agencies... some have really impressed me).

Re:There is no such thing as a "free" gov. service (1)

Bearhouse (1034238) | more than 6 years ago | (#20755569)

What's wrong with that? Should the poor be made to pay for street lighting?

I'm no fan of big gov. or taxes, (as a self-employed consultant living in a high-tax country - believe me, I'm REALLY not!)
Like you, I've worked with gov. agencies and I'm pretty sure I'd still have my own ISP - like my kids go to private schools.

Yet I accept that some of my tax dollars are and should be used to help people less fortunate than I am. Plus, I'm sick of having to re-buy access, at exorbitant rates and with indifferent security, every time I want to use a hotspot in a cafe, hotel, airport...I want wifi everywhere for ME too - for starters, my GSM bill would shrink if I could use VOIP even 1/2 the time. Tell me I have to pay 50 bucks per year more on my property tax to have free wifi everywhere in my town and I'll pay like a shot, (and I HATE paying taxes). Why? I would SAVE money and help people. Sounds like a win-win to me.

As for library access, (another poster), c'mon...that's a cop out. My kids are on the net day and night, for both work and play. Me too. Also, some people are handicapped, don't have a library nearby...

Re:Shot in the arm for failed municipal wifi, etc. (1)

Capt James McCarthy (860294) | more than 6 years ago | (#20754813)

"many of which originally intended to help the poor who - as often - were missing out on an important part of modern society."

Because we all know the most important thing that poor folks need is internet access. You do realize that they already have this access if they chose to go to a library.

Tax teh intarweb? (1)

Lookin4Trouble (1112649) | more than 6 years ago | (#20754123)

When this country _still_ has the lowest percentage of its population on broadband of any developed nation (and its users pay more per kb/s of bandwidth than any other country's)? That'd be like paying a toll to ford a river when everyone else in the free world is using a 10-lane highway free of charge! The original bill was implemented to speed the proliferation of connectivity, and has failed miserably (compared to other country's efforts). What lessons can we learn from, let's say, the UK - where 94% of the population at least has the OPTION of broadband connectivity? Has a similar tax / tax exemption been in effect there? Seems we're only getting half of the question side of this equation, making it impossible to really come up with an answer...

Re:Tax teh intarweb? (0)

ScentCone (795499) | more than 6 years ago | (#20754281)

That'd be like paying a toll to ford a river when everyone else in the free world is using a 10-lane highway free of charge!

Yes, 10-lane highways are COMPLETELY free of charge. Other than the billions each year that it costs to build and maintain them, which come out of tolls and taxes.

What lessons can we learn from, let's say, the UK - where 94% of the population at least has the OPTION of broadband connectivity?

Hmmm, let's see. Perhaps we could learn the lesson that the UK is geographically a very different, and much smaller place? And that population densities are different, and that the number of miles of copper to get to a small rural household in Nebraska are very different than outsite, say, Glasgow?

What are you saying, here... that we should all pay more taxes to subsidize the building of networks out to very remote rural areas - at the cost of many thousands of dollars per household, and then hand that infrastructure over to private operators? Or are you saying that the government should collect taxes from city dwellers to run fiber out to rural folks, and then the government itself should be the ISP? Rather than drawing poor comparisons to places that aren't demographically or topographically at all similar, why not say what it is you think should actually be done to get broadband to someone that is 20 miles down the road in the middle of a cornfield without that person having to actually pay for that service's existence?

Or, maybe you should cite some stats on how rural Siberians and Laplanders are getting THEIR broadband? Or ranchers in the middle of Patagonia?

Re:Tax teh intarweb? (1)

Lookin4Trouble (1112649) | more than 6 years ago | (#20754471)

You're missing the point here. Demographically and Topographically speaking, 87% of Americans live within a 20 mile radius of a major urban hub. I think 87% is a good number to shoot for as far as broadband access goes, but it's not going to happen out of the goodness of the hearts of the ISP. I'm also not saying that the government should be the ISP. You can twist statistics any way you wish, but the point still remains - availability of broadband access is still the lowest in America of any _DEVELOPED_ nation (sorry Patagonia), and its users already pay more per unit of bandwidth than any other. Why stack more taxes on top of that? A different user posted that they're paying $100/month for 8Mbit/sec. I'll even take that as a combined number (say, 1.5up, 6.5 down). The same service here (IF it's available to you) would range between $350-$1,200/month just for the subscription, not to mention getting the ISP to run line to you. I absolutely do think that the farmer 20 miles from nowhere in the middle of a cornfield should either pay for line run, or be happy with (abunchofwifirepeaters). It's one of many downsides to living in the middle of nowhere, but that option is not available to said farmer, and that's a sad state of affairs for residents of America.

Re:Tax teh intarweb? (1)

ScentCone (795499) | more than 6 years ago | (#20754689)

but it's not going to happen out of the goodness of the hearts of the ISP

And why should it? So, out of whose hearts/pockets to you suggest that it SHOULD happen?

87% of Americans live within a 20 mile radius of a major urban hub

And it still costs a fortune to run fiber more than a few hundred yards. And the laws of physics mean that DSL doesn't get you anywhere close to that 20-miles-away guy. So there is a MUCH larger layer of infrastructure that has to flow out, mile by mile, all the way through those hundreds of square miles around that "hub." The guy who is 15 miles away from an urban center might as well be 1000 miles away, infrastructure-wise. If you can't make a compelling case for someone who is only going to be able to charge $40/month to string up service that it will cost them many thousands to deploy, and you don't want to have the government do it, then there really aren't many options.

Why stack more taxes on top of that?

We're not disagreeing about that. I'm trying to point out that unless someone personally pays for it, or a company finds it worth investing in, only taxes will get it done... or, it can just WAIT. Which is exactly the current situation. Can't have it both (or all three) ways.

It's one of many downsides to living in the middle of nowhere, but that option is not available to said farmer, and that's a sad state of affairs for residents of America.

Of course the option is available. Right now. Today. Someone just needs to write the check. The repeaters are off-the-shelf, fiber can be pulled, microwaves work... it's only money. So: whose money? You can't lament that he doesn't have a cheap option while pretending that a rural user in Korea got the same service without paying so much. SOMEONE paid so much. We just don't socialize it as much here, and so the costs are clearer, and you have to make more of a commitment if you want it. Or, be patient while more easily deployed solutions evolve. It's not a condemnation of the US that it's hard to get broadband to show up in a sparsely populated fringe suburb when the suburb itself is bigger than many of the entire countries that are contributing to your statistics.

Necessities... (1)

terrence.donnelly (1144137) | more than 6 years ago | (#20754153)

That's like taxing my shower. Or my microwave. I quit.

Re:Necessities... (2, Insightful)

geeknado (1117395) | more than 6 years ago | (#20754249)

You don't pay taxes on your water or electricity bills?

USA, welcome to the rest of the world! (1)

monktus (742861) | more than 6 years ago | (#20754181)

Here in UK, government taxes you! But seriously, we've always been taxed on Interweb access just like we get taxed 17.5% on everything else. Obviously the situation is a little different for you guys as sales tax varies by state, however our telcoms (and pretty much everything else) are poorer value for money than in the US and even our European friends. Until I managed to negotiate a massive discount from them recently, I paid around $100 a month to my ISP for my 8mbit ADSL and landline (inc. VAT and free calls to geographic numbers).

moVd uP (-1, Troll)

Anonymous Coward | more than 6 years ago | (#20754199)

Oblig spelling nazi (-1, Redundant)

hcdejong (561314) | more than 6 years ago | (#20754333)

If you're going to rewrite the title of the submission, is it too much to ask not to introduce spelling errors?

17%? Er, what? (0)

Anonymous Coward | more than 6 years ago | (#20754341)

Sounds a bit disingenuous to me, although I haven't RTFA. The feds tax gas at 18.4 cents per gallon. [gaspricewatch.com] As gas here is around threee bucks (I paid 2.999 yesterday), that makes the federal tax on gas 6.1 cents per dollar; 6.1%. Here in Illinois there is another 21.5 cents per gallon tax, making the combined state and federal taxes on gasoline 13.2 cents per dollar.

So this says that as of November 1, there is going to be a greater tax on internet access than gasoline? And if it's a federal tax only, it will be over twice the rate gasoline is taxed?

Sorry if I'm a bit skeptical. This kind of sensationalist reporting is NOT the way to get me to write my congresscritters.

-mcgrew [mcgrew.info]

(fittingly, the mind reading capcha is "limping", but the way some letters are hollowed out makes it look [slashdot.org] at first glance as if it says "mpg".)

Good! (0)

Anonymous Coward | more than 6 years ago | (#20754729)

Taxes help the poor and the children.

Let's just make up some numbers! (0)

Anonymous Coward | more than 6 years ago | (#20754883)

prices for Internet service nationwide could jump by as much as 17 percent, according to ISPs
Er, how did they possibly arrive at that exactly number? If the government puts a 25% tax on it, prices will jump 25%. If the government puts a 1% tax on it, the prices will jump 1% (assuming ISPs don't change their prices in anticipation of a tax).

Of course, notice that the ISPs don't say anything about the 17% being a new tax. They just say that with the ban gone, the price will go up 17% regardless of any actual taxes placed on the service. Remember, the removal of a ban is not the same thing as creating the thing that is banned (it's the first step, not the last).

What is the tax for? (4, Interesting)

foniksonik (573572) | more than 6 years ago | (#20754983)

Taxes are typically set in order for the government (State or Federal or City) to aggregate some money to DO SOMETHING. What will they DO with this money? If they will build out Municipal networks with the money, extend fibre to neighborhoods that don't currently get it because it's not profitable enough for the private company to invest, then I am FOR the taxes. If it's just going to go into a slush fund that will pay bonuses or something then I am AGAINST the taxes.

Does anyone know what these taxes are for?

Hey idiots and non-readers (3, Informative)

GarfBond (565331) | more than 6 years ago | (#20755207)

This is a ban on Internet SERVICE taxes, not state sales taxes. This would prevent a collection of sales and other taxes on your monthly ISP bill, such as what occurs with your cell phone and usual cable bill.

Drug Dealers (1)

nurb432 (527695) | more than 6 years ago | (#20755595)

Get people hooked, ( by getting it into everyday mainstream business as nearly a necessity ) then raise the costs incrementally until people balk. Then back down just enough so people can keep buying the drugs..

Internet tax (1)

atomsmasher01 (1159377) | more than 6 years ago | (#20755653)

Well isn't that just like the world tax tax tax. What will this revenue be used for if I may ask? surely not anything good ofcourse.

Doesn't make sense (1)

Pinky3 (22411) | more than 6 years ago | (#20755833)

I have cable service for internet and digital tv. If I watch "Heros" from the tv feed, I pay a tax on the tv service. If I watch the same show after downloading it from nbc.com, I don't have to pay a tax on the internet service. Both downloads come over the same cable in digital form. Please explain why one should be taxed and the other not.
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