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June 10 2015

Keep the Internet Tax Free

Carrie L. Lukas

Charlotte wrote earlier this week about the Permanent Internet Tax Freedom Act, which was about to go before the House of Representatives.  Here’s the latest update:  the bill passed the House yesterday so will now head to the Senate.

Some Americans might be tempted to ignore an issue like this, assuming that the government wouldn’t tax something as important as the internet and therefore there is really no need for Congress to take any action.

Yet they’d be wrong.

First, people should note that wireless services have some of the highest tax rates of any product.  Policymakers see popular products and services as the ideal vehicle for collecting tax revenue because they know that most of us are going to keep buying a service we see as critical, even if the price rises because they’ve tacked on a new tax.

That means that the main consequences of taxes like the wireless tax are that they just leave less money in our pockets.  It’s a particular hardship for those with lower incomes since they have less money overall, so the wireless charge can pack a real punch.

If the ban on internet access taxes were to expire, we could expect to see governments hungry for a new way to raise revenue quickly turning their sights on the internet, just as they have with wireless.

The Permanent Internet Tax Freedom Act is particular necessary since the FCC’s new net neutrality rules pave the way for governments to start taxing broadband.  If this Act becomes law, the FCC could still find a way to levy new fees under net neutrality, but it will at least make it a little harder.

There’s an old adage that if you want less of something, then tax it.  We don’t want less access to the internet and less technological innovation over all, so it’s good news that the taxman may be held at bay from the internet at least.  

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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