California Considering More Internet Taxes

dcg writes "San Francisco Chronicle is reporting on how web taxes could help the states, especially California, with its budget woes. One particularly disconcerting comment is from California's Controller Steve Westly. 'In addition to sales taxes, Westly said he is considering a tax on Internet access like those that appear on telephone bills. He also is looking at a tax on software downloads.' Would this affect only purchased software, or could sourceforge.net become a source of revenue for the state..."

Comments

Looking the wrong direction

[jmuzic1]

Amazing how quickly they look to tax more instead of looking at their budget and ridding themselves of all the bloat of government.

Re:Looking the wrong direction

[Anonymous Coward]

In a "democracy" like ours, it's a habit of the
majority of entrenched politicians and parties to
empty the treasury for their favorite constituency. Only now, the government has grown so huge and omnipotent that it no longer matters where the money is coming from in the first place, or where it's going. Pick your favorite political issue, juxtapose it with either "we're raising taxes in order to increase revenues" (during an economic downturn?!!) or "revenues are pouring in like never before", and you've got the perfect excuse to increase the national debt.

Re:Looking the wrong direction

[zulux]

There are budget cuts happening all over California. They're coming in public schools

Good. There is olny a faint coralation between spending and quality of education.

Germany and Japan spend less, per child, on education and they both kick our asses.

Short answer: fire half of the school administrators, get rid of the retarded children, raise teacher saleries, get rid of the 'team sports', and ban disruptive children permently.

That would solve most of our problems in our education system and we'd end up spending less.

Re:Looking the wrong direction

[rworne]

You can't just slap together a power plant in a few months.

California hadn't built any plants for years before the power crisis, possibly a decade or more. The main reasons are all the environmental studies, regulations, NIMBYism, and protestors.

Californians are just reaping the fruits of their political choices, plain and simple.

Bush and his gang might have left California in a lurch just for "payback". As a Republican living in California, I somehow find all of this less than amusing.

Re:Looking the wrong direction

[Anonymous Coward]

This is patently false. The California state legislature voted to cap energy prices for consumers under the guise of deregulation.

You're telling the truth but not the full story. At the time that deregulation was being sold to consumers the cap was considered irrelevant. The two messages hammered into the public's awareness were:

-- The removal of oversight was going to produce such huge competition and cost advantages that prices would go way down (far below the cap).
-- You could choose the source of your electricity (billed separately from power distibution for the first time), so you could decide between cheap power or less cheap green power, for example.

Neither of these lasted. But deregulation did occur and lots of money was made.

Re:Looking the wrong direction

[Anonymous Coward]

Why didn't California build more power plants instead of buying their energy?

By the time the high prices arrived it was too late.
Before that? Well, the state doesn't usually build power plants and deregulation means that it doesn't tell companies what to do any more. The private companies and utilities held off on construction to see what would happen in the newly deregulated environment they had asked for and sold some of their plants to the out of state corporations you may have heard about.

Re:Looking the wrong direction

[lpq]

So there you had Californians paying pennies on every dollar the state of California expended for energy

Ever check the prices for electricity around the nation?

Before the energy shortage?

California had the highest rates in the nation. Texas, at the time, had one of the lowest rates. Enron gives away cheap energy to texas to support bush, Bush grabs presidency, Enron tries to bail itself out by gouging Californians -- Bush's enemy, Enron goes bankrupt after California government steps in and negotiates contracts that remove carpet from under enron feet.

So californians, paying pennies on the dollar? You're right. During the energy crisis instead of 1-4 cents/kwh rest of nation pays, we were being charged 20-70+c/kwh...so your damn right we paid pennies on Texas's dollar...and your point?

Seems like the budget problems have gone hand in hand with the recession -- or hasn't anyone noticed that? Why doesn't the State do what every other company does in tight times?

*cut back*...

Noooo....government is a one way affair...just keeps growing and growing...takes on a life of its own...supposed to be of the people by the people and for the people. ... guess last presidential election proves that isn't true anymore...

Re:Looking the wrong direction

[andcal]

Bush and his gang might have left California in a lurch just for "payback".

Or, Bush and his gang just might have left California "in a lurch" because if he bailed them out of their own mess, other states' crooked politicians may have thought they would have a similar safety net when making similar stupid decisions.

All Bush did was let California's leaders sleep in the bed they made themselves.

Re:Looking the wrong direction

[rworne]

California has a long approval process. If you know what that means, it means "environmental impact study" along with whatever permits are required.

It's been commonly said that no power plants were built in the 90s, and the environmentalist websites try to debunk that. After reading what they say, it turns out there were some plants built. All small, mostly non-utility plants.

In this article, near the bottom, it talks about environmental and (mostly) political opposition to natural gas burning power plants that are popular in California.

But we may be both right, here they talk about this:

What most likely stopped many power plants from actually being built is a powerful NIMBYism (not in my backyard) mentality in California that is in no way limited to "environmentalists." Almost no one -- neighborhoods, businesses, golf courses, hotels, etc. -- wants a power plant, a landfill, radio tower, etc. in their backyard. The environmental "extremists" that often oppose such projects no matter what, often team up with local citizens and businesses (i.e., non environmental extremists) to stop the project. However, many projects are stopped by NIMBYism alone (i.e., little or no environmental opposition was present). NIMBYism and Environmentalism are not the same entity, although NIMBYists often use environmental arguments and they
often enlist environmentalists and environmental groups for support. Ask yourself two simple questions: If someone proposed a new powerplant or new landfill near your neighborhood or business, would you try and fight it? Do you consider yourself a
liberal environmentalist?

welcome to Nevada

[technoCon]

how long would it take for every server with any kinda taxable activity to relocate to Nevada? or Vanatu? You can bet that after any government starts taxing something, it'll never be free again. The power to tax is the power to destroy. This is an opening move in the destruction of high tech in California.

My dad worried about out-sourcing union jobs to Mexico. I worry about out-sourcing programming jobs to India. What's to stop the out-sourcing of all the other high-paying professions to low-tax areas?

Re:Tax on Downloads

[ewhac]

"This software is licensed, not sold..."

A popular quote from most end-user license "agreements" (which are all unethical, anyway). Different tax rules apply for license transactions than sales transactions.

Schwab

Revenue booster?

[Sheetrock]

Like most people, I enjoy using the Internet on a daily basis but consider it a luxury I could live without. Taxing Internet access makes more sense than taxing phones or food or other staples of life because it is generally the well-off that can afford access to it.

Likewise, Internet sales taxes are desperately needed. Not only are the well-off more likely to purchase things online, but the fact that they can dodge sales tax by doing so while the poor must pay when they go to the local stores is nearly an insult: this is one of those 'rich getting richer' schemes that doesn't get much airplay, but it should.

I'll agree that it's been a pretty fun ride, but we've already discovered that the Internet isn't free. Now it's time for the tax collectors to catch up.

Re:Revenue booster?

[apweiler]

I have to disagree on some of this. You're right, stuff bought on the net should be taxed the same way anything bought the usual way is.

But I think that the internet as such - not to be confused specifically with e-commerce - will become more and more (and to some extent, is already) of a 'staple of life', like the phone system already is.

Just one example - I'm in the process of applying to and entering UK university. Right now I'm organizing a trip there to visit some of them before I make the choice. I'm arranging the visits by e-mail - sure, it would be possible by phone, but I wouldn't say this is a luxury, it is a real practical improvement.

I think the net will become much more important, and certainly is not a luxury for many people even now. "The internet isn't free" - well, a lot of stuff is. In cases where money does change hands, taxes should be paid as in regular offline business.

Will lose more business for California....

[jsimon12]

All this will do is accelerate the exodus of high tech firms from California. Many companies are already moving operations to cheaper states, Sun for example is moving a lot of its operations to Colorado. All this taxing is going to do is accelerate that process and leave California with a smaller tax base in the future. Few politicians seem to think more then 2 or 4 years down the road, basically what they need to do to get reelected.

Re:Tax on Downloads

[cervo]

The article did not mention if the tax is on commercial software, in which case a sales tax would take care of that. Ie if a company buys a license/something normal taxes should take care of that ftp transfer. If the whining government gets their way with internet sales taxes anyway. Or even a tax on license transfers based on money, if the reply about different taxes for license transfers is true. But the article made a specific point of mentioning download tax. Does this mean that even free software, shareware software, GPLed software, etc. is going to be charged?

The article mentions "In addition to sales taxes, Westly said he is considering a tax on Internet access like those that appear on telephone bills. He also is looking at a tax on software downloads."

What does this mean? Especially with regard to "software downloads". At first I was thinking that commercial software ie you buy windows or something and in the future Microsoft offers a cheaper version for delivery by download and here they have it. Naturally you pay a tax on the commercial price was my thought, but this expression is too vague. It does not limit it to commercial. The tax could be $.50 per software download of any type. Also keep in mind that the country is controlled by big business. Someone like Microsoft could easily pay off the government to make it a reality. A tax on any transfer could easily hurt free software. I download tons of free programs that end up crap and I delete. But occasionally I find that one gem that makes it all worth while. This would definitely encourage people to experiment less and then the company with the best advertising budget would probably win your business, instead of Joe Blow out in the middle of the desert who writes a freeware version of the same program.

Re:Enron et al.

[mako]

First let me say nice troll.

This is of course patently untrue. California is in this position due to mismanagement. Gray Davis is a moron. California wanted to purposefully make deregulation look like a failure so they passed laws doomed to fail. Combined with the inability of utilities to build power plants due to the Green i.e. Communist (all environmentalists hate private property rights but this is another topic) policies in place.

So the people of California got a wonderful lesson in supply and demand. Unfortunately instead of learning their lesson they whine and cry like the children they are.

Unbelievable

[M.C. Hampster]

It's unbelievable the amount of ignorance that exists when it comes to the California energy crisis.

First, I would like some sort of explanation and proof that California's deficit is almost entirely to blame on the energy crisis? Is the fact that most states are experiencing deficits also do to the California energy crisis? Or, perhaps, it has something to do with the fact that our economy has slowed down. Or the fact that during the 90's the Californian State Government increased spending way past inflation.

Second, the "deregulation" scheme enacted by the legislature was hardly a joke. They did not setup anything even remotely recognizable as a free market system.

Third, GWB and FIRC ended up setting price controls.

Fourth, GW Bush was not and is no longer vested in energy corporations.

Do you wish for me to continue? I'm not some huge GWB or Republican drone or fan, I just hate seeing all the FUD that surrounds the entire energy issue.

Re:Unbelievable

[Fulcrum of Evil]

Fourth, GW Bush was not and is no longer vested in energy corporations.

Nice of you to contradict yourself in a single sentence.

Re:Unbelievable

[Brat Food]

I would like some proof that bush is no longer vested in any way with big enrgy.

For that matter, lets look in to cheney.

Not vested means he also has no "good friends" and campaign donators in that bunch. It means he owns no stock or any company that benifits from the companies in question.

GWB and his posse is also were the ones who said there was no price fixing going on the whole time, even though now execs are coming forward ADMITTING to it.

You dont need to be a GWB fan to get your facts wrong.

Patently false? Not quite.

[forii]

This is patently false.

Patently False?

Not

quite.

Sure, California's scheme for "deregulation" had some major flaws, but that doesn't excuse Enron, as well as other energy corporations from committing wire fraud, to the point of almost bankrupting the state.

You Need to Prove He Said This

[VividU]

How lame. An AC attributes a quote to the Governor of California overheard at a "private dinner" and it gets modded (+5). It's actually more revealing of the type of morons that frequent this great site than any thing the Gov. supposedly said.

Re:Who broke the word?

[Graspee_Leemoor]

"The net started as a fringe activity among geeks, and should have *stayed* a fringe activity among geeks. Imagine if we had kept it secret: no spam, no taxes, no newbies"

Imagine! We'd all be using dial-up which would cost us by the minute to use, p2p would not exist (or there would be a hell of a lot fewer people sharing files), there wouldn't be great news sites like the bbc on the internet, when you applied for a job and said you'd email them your cv you'd get a blank look, newly-released pc games would not have multiplayer over the internet options ETC ETC ETC.

The basic thing is- especially if you are being serious rather than trolling, is that although we now have spam, big businesses on the internet and other insane things, we do have a lot of advantages that we wouldn't otherwise have had.

Back when the www started I used to go out to our university's terminal room and see if anything had changed "on the world wide web". It was possibly to check a large percentage of the www and then go, "oh, nothing's been updated".

And don't even try to force me back to the pre-www days when I thought that downloading a weather picture over the internet that I couldn't even see until I sent it to the laser printer was COOL...

graspee

Re:Great way to drive Internet stores out of busin

[Anitra]

Though, even without taxes, why would a consumer pay $10 shipping for something he can get a 10-mile drive away?

You would if you're like me and don't have a car. It's usually a lot easier to find something online and have it shipped to your door than harass someone else to drive you to the store.

The root...

[Brat Food]

enron fun
Califronia got hit in 2 huge ways at te same time. The above is just further proof of what people already knew: Enron and other energy companies bilked california out of millions? billions? This, at a time when californians were in a slide due to the .com crash. California may have made some mistakes in its deregulation, but this was blatent abuse of the system, which was allowed by the president to go on WAY too long. You dont drain that much money out of an already faltering economy and expect it to do well, and its people to be prosperous. This brings us to internet taxes: just a bad idea. Eventually, every state is going to want a pice of the action, and in the end, its the consumer who gets dicked once again, and it will be the end of online shopping as we know it. I already find it hard to order items from in state, as shipping and tax together mean i can get a better deal locally a lot of the time. Maybe thats what they want, but I feel regualtiong this will be stupid, and it will do nothing to help the economy in the long run.

Re:MODERATORS: WTF??

[zulux]

Why are you modding this troll up? Can the next moderation-happy person actually READ that this guy is suggesting to GET RID OF RETARDED CHILDREN (something about room with spikes in the follow up).

Good greif, sombody needs to lay off the crack pipe for a while.

It's called satire.

Re:Patently false? Not quite.

[Reziac]

IIRC, starting from a surplus to boot, and blasting California's credit rating from A to (last I heard) C in the process.

Tax-and-spend mentality, after all that's only a few thousand extra we need to suck out of each and every state resident... :(

BTW did anyone hear if the doubled vehicle license fee was signed or vetoed? Last I heard it had passed the state legislature, tho supposedly Davis was going to veto it (doubtless prompted by the peasants with flaming pitchforks who were storming the governor's mansion, rather than from any real concern for taxpayer's wallets).

Wait a minute!

[stinky wizzleteats]

States are having budget crises for the same reason we are - there's a RECESSION. I therefore don't subscribe to the idea that the people, suffering under the same fucking recession, should somehow be expected to foot the bill to maintain the pre-recession budget levels of state governments.

If tightening our belts is good enough for us, why is it not good enough for them?

Re:Flat Rate tax would be a nice idea

[legojenn]

I don't know a lot about the US system of government , but what I do know is that it would probably require a constitutional amendment transferring that form of taxation to the Federal government. The americans aren't to keen on amending the Constitution. How many amendments in 220 years (The war of Independence ended in 1773.)? Fourteen or so.