More Internet Taxes, This Time E-Mail

When there’s a bad idea like taxing e-mail, chances are that it originated in California.  Before taking a closer look at this flawed proposal, let’s take a step back and consider a short list – an entire blog could be dedicated to the various ways we are taxed – of some of the ways we’re taxed each and everyday of our lives.  Our property is taxed. Our income is taxed. Our investments are taxed. Our purchases are taxed.  This list could go on and on.  There’s been one thing however that’s successfully – and appropriately – avoided the tax man’s reach, the Internet.  With the Marketplace Fairness Act and now a proposal to tax e-mails, citizens could be forced to fork over more money to the government.

FoxNews.com recently reported that Berkeley City Councilman Gordon Wozniak introduced the idea at a city council meeting.  During the council meeting Wozniak explained described his proposal for the taxing the Internet in more detail.  He offered, “There should be something like a bit tax.  I mean, a bit tax could be a cent per gigabit and they [the government] would make, probably, billions of dollars a year.”  To soften the blow of his outrageous proposal he noted that the bit tax would be “very tiny tax on email.”  Perhaps even worse, he’d like to see the extra revenue the “bit tax” would bring in to subsidize in an attempt to save the woefully failing Berkeley’s local post office.

The FoxNews.com piece correctly highlights the danger of this idea by explaining that Wozniak’s proposal “goes beyond already-controversial proposals to tax e-commerce — like buying used books on Amazon. This would be a tax on data.”  Fortunately, for the moment at least, Wozniak’s proposal is dead on arrival. This is because local governments are not able; do not have the jurisdiction to tax the Internet, thanks to Congress’s passage of the Internet Tax Freedom Act.

The trouble is the idea of the federal government imposing a tax on the Internet is one that continuously rears its ugly head. But each time it does, Taxpayers Protection Alliance has been on the scene to quash it.  In an unfortunate vote for taxpayers and businesses, the Senate voted to pave the way for expanded state sales tax collection for online purchases, which could eventually lead to the passage of the Marketplace Fairness Act.

As Americans for Tax Reform (ATR) explains in a letter to Congress, “While achieving ‘fairness’ may be a laudable goal, it cannot be an excuse for increasing the burden on taxpayers.”  In addition to the gravest issue of higher taxes for taxpayers, a lot of other shortcomings exist in this bill. For example, it would create a bureaucratic, organizational nightmare for online retailers by imposing onerous, unreasonable demands on their business transactions.  As R Street Institute Senior Fellow Andrew Moylan explained recently in an op-ed, “…online retailers would be denied that convenient standard and would be forced to interrogate their customers about their eventual destination, look up the appropriate rules and regulations in more than 9,600 taxing jurisdictions across the country, and then collect and remit sales tax for that distant authority…Because they would now have to comply with the complex tax codes in more than 9,600 tax jurisdictions, remote retailers would be weighed down by substantial compliance burdens.”

This fiscal assault on taxpayers, the Internet, and now e-mails, must stop immediately.  Imagine if government officials were this obsessed with cutting spending as they are with raising taxes.