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Possible Taxes For Broadband Users

Posted by Zonk on from the i-object! dept.

Morganis101 writes "CNET News reports that some broadband users might have to endure new universal service taxes. From the article: 'The suggestions came as lawmakers started debating changes to the Telecommunications Act of 1996, which created the framework for the Universal Service Fund. The USF should continue to be industry funded, but the base of contributors should be expanded to all providers of two-way communications, regardless of technology used, to ensure competitive neutrality, a bipartisan coalition of rural legislators said in a June 28 letter to the U.S. House of Representatives Energy and Commerce Committee, which will be drafting the rewrites. That means companies providing broadband services such as VoIP over telephone wires would also have to pay into the fund.'"

14 of 262 comments (clear)

  1. I for one... by tekiegreg · · Score: 2, Insightful

    Would welcome this with some skepticism and hope that the revenues from such a tax might go to benefit the online community (less Spam, Phishers, Identity thieves, etc). Then I remember, U.S. government, War in Iraq....*sigh* pardon me for being so naive...

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    1. Re:I for one... by ConceptJunkie · · Score: 3, Insightful

      The funny thing is that war in Iraq is peanuts compared to all the other pork barrel stuff we the people subsidize.

      $200 billion is some real money, but compared to trillions a year, it's chump change.

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    2. Re:I for one... by walt-sjc · · Score: 3, Insightful

      Um, 40% of the USF is marked for the E-Rate program which is littered with mismangement and fraud. The LAST thing they need is more money.
      CNet had an article a while back about it.

  2. Future speak by Hachey · · Score: 2, Insightful

    Anyone else notice all the 'future speak' in the article? Should, might, will, suggest? Politicians are fluent in the conditional tounge. I wouldn't worry about it.


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  3. Taxation Without Reputation by Doc+Ruby · · Score: 2, Insightful

    Why should the richest people in America pay taxes, when they can just hire "personal Websters" to surf the Net for them, and pay their taxes out of their minimum wages? Or just save that extra markup by outsourcing the Internet work to India? All the government does is stop rich people from making money. Why should they pay for it, when they can pay much less in campaign bribes^Wcontributions, to keep the little people in line, at their own expense?

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    1. Re:Taxation Without Reputation by Doc+Ruby · · Score: 2, Insightful

      You must live in a Blue State, which pays more in taxes than it receives. Not a Red State, which gets that spending surplus at the expense of the Blue States. Or perhaps California Blue County. Or maybe you live in a Red County, which is why you're whining about paying taxes to support the government that protects and enables your wealth, instead of those poor people who get so little benefit from it. Oh, it's their fault they're poor - education and birth have nothing to do with the relative level of opportunities in this country. BTW, what did you spend your tax rebate on? Job-creating stocks in the market, or more gas for your SUV? Which was made by poor people, the oil for which gas was secured by poor people.

      No wonder you posted Anonymously. You know how expensive it is to keep your kind of class war masked, and how just furious you'd make Muffy if someone noticed your privilege showing.

      What pisses me off the most is how people like you are ruining the possibility of a national sales tax, to replace the ridiculously rigged income tax. Which would give us a chance to protect minimum survival expenses from taxation, while getting corporations and rich people like you and I to pay our share of the government that serves us. Instead of pounding poor people so hard that they become completely ungovernable, and take more than the little bit bled off for them today.

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    2. Re:Taxation Without Reputation by geekee · · Score: 2, Insightful

      " Why should the richest people in America pay taxes [nytimes.com], when they can just hire "personal Websters" to surf the Net for them, and pay their taxes out of their minimum wages [dol.gov]? Or just save that extra markup by outsourcing the Internet work to India? All the government does is stop rich people from making money. Why should they pay for it, when they can pay much less in campaign bribes^Wcontributions, to keep the little people in line, at their own expense?"

      Your sarcaastic commnent is bs. In fact the top half of taxpayers pay over 95% of the federal tax burden. Liberals like Wes Clark suggested a family of 4 making $50K or less should pay no taxes. Progressive taxes do hurt everyone, since they make it more difficult for productive people capable of generating wealth honestly to employ people and provide goods and services people want.
      BTW, there's a difference between revenue and profit. If you generate a million dollars in revenue, but spend $900K, to get it, and you get taxed on 1 million, your $100K profit turns into a massive loss after you pay several hundred thousand in taxes on it.

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    3. Re:Taxation Without Reputation by Doc+Ruby · · Score: 4, Insightful

      Your tax breakdown is BS. Maybe you didn't read the link I posted, but the number of rich people who pay no taxes just increased to 115% in the past year alone. How do you explain that? Their productivity?

      Or some pedantic distinction between revenue and profit? What's your point? Corporations don't pay taxes on income, they pay it on profit. And anyone who's paying 90% of their income to make it is the kind of fool who makes $1M a year only by theft - and they don't pay taxes. Like those people paying no taxes, or the 50% of corporations which have paid no taxes since 1998. Where are you getting this "generating wealth honestly" BS?

      To be more precise about your BS talking point justifying the free ride you want out of the tax system: The top 50% had 86.2% of the income. Sure, they paid 96% of the taxes, on "only" 86% of the income. But the bottom 50% had and income under $29K. Consider the overhead we all must pay for food, shelter, energy, clothing, which comes out of that first $29K. After that, it's all Mercedes, beach houses, caviar... or rice & beans. Even if $20K is overhead, that remaining $9K ($600:month) at the bottom is being taxed at about the same rate as the remaining several million at the top. Especially when we're talking about the very top: the top 1% have about 125% the income of the bottom 50%.

      FWIW, I'll see your irrelevant "Wes Clark", and raise you the relevant Grover Norquist. Who hates taxes, but not as much as the government itself, the "beast" he hopes to "starve", "until it's small enough to drown in the bathtub". You're going to love that, when there's no government to tax you, but also nothing stopping corporations from ripping every cent out of your hide.

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    4. Re:Taxation Without Reputation by Anonymous Coward · · Score: 1, Insightful

      This is why the flat tax is the solution. It cuts out all the tax shelters. As proposed by Forbes, any family making less than 40k would be tax free. Most people would end up paying the same and taxes would be simpler to figure out.

  4. Logic? by BlackMesaLabs · · Score: 3, Insightful

    At what point does the government need money from me because I'm on a privately run network? The internet is not owned or operated or maintained by any nation, so I don't see why we should pay taxes. (exceptions of course being things like govt. websites, but they are a different case)

  5. Interesting timing by mehtajr · · Score: 2, Insightful

    It's interesting timing that just this week the Supreme Court ruled for the FCC when they ruled that cable modems are not "telecommunications services, " but rather "information services." Might that exempt them from any proposed taxes?

  6. The collective American Piggy Bank by silentbozo · · Score: 3, Insightful

    Just goes to show you that when our "elected representatives" look at us, the electorate, all they see are pockets to be picked. Whose idea was it to concentrate all that power in the hands of the very few, anyways?

    I already pay 7.65% for FICA (ie, Social Security), but were I to run my own business and turn a profit, I would have to pay double that, since I would be both employee and employer. Of the money I get after FICA, state and federal income taxes, and state mandated unemployment insurance, I then get charged 8.25% in sales taxes, surcharges and strange fees for my electric, water, gas, and telephone bills (including that 3% tax left over from the Spanish American war, which was well over a century ago), and twice a year, I have to fork over money to the local county for the privilege of owning tangible property.

    And for this I get: roads that still need fixing, bribery and corruption scandals that cost taxpayers money, ever-increasingly complex laws that require you to have a law degree just for self-defense, school districts that wail and complain that they need bond money, but then turn around and spend the money building shopping plazas on top of abandoned oil fields, leading to the project being declared unusable, and of course, the innumerable tax breaks and pork-barrel projects doled out by our collective congresscritters to keep their districts happy at the expense of the rest of the United States.

    It's a pity that elections couldn't take place in late April, say a week after tax day. Oh well, I might as well start working on my taxes for NEXT year...

  7. Moronic subsidies for rural customers... by stuartkahler · · Score: 2, Insightful

    (sub)Urban America deserves subsidies from the rural folks to help offset the astronomical prices of land that we pay. Land in rural areas is as cheap as $2000/ acre vs $100000+ / acre in the suburbs alone. They can pay me my my share out of the USF until that runs out next week. We can work out a deal for the rest; maybe start with some loose country girls.

  8. Can't work; the Reps singning the letter know it by spisska · · Score: 2, Insightful

    I'm not one to bitch about the editing here, but this title really ought to have read: Possible Taxes for US Broadband Users.

    That having been said, the purpose of the USF was (is) to ensure that telecom companies extend coverage to sparsely populated areas rather than just staying in cities where they get far more uses per kilometer of cable, right?

    They can try to wrap this with libraries and schools, but those entities are funded through local and state governments. As far as healthcare goes, it seems the only thing the US government is interested in funding is marble paneling for the lobbies of Eli-Lily and Phizer.

    I guess my question is, how much new cable is actually being laid in rural America? Aren't the telcos much more focused on putting up cell towers and selling much more profitable wireless plans?

    What exactly is a provider of two-way communication? Does that mean that every web-site has to pay (since an http request and response is two-way)? Would it mean that Slashdot gets taxed but Drudge Report doesn't, because users can communicate with each other through the former?

    What about Skype? Does it mean I'll start getting a monthly bill for $0.00 (10.2 percent of what I pay) from Skype to cover this?

    What if, as a previous poster noted, I set up an asterisk box and route all my calls through a number in the UK, or Canada, etc? What if I start selling Canadian numbers here in Washington DC but my company is legally seated in the Caymans?

    All of that aside, this is just a letter sent to a Congressional committee, not a law and not even a bill. It was signed by 60 of 435 Reps, mostly so they can go home to their constituents and talk about how they are fighting that damned bureaucratic machine in Washington to win rights for rural America.

    It's also quite likely that none of the signatories actually want or expect this to go anywhere, because if it did they would have to explain in the next election why they made grandma pay taxes for her AOL account.

    Rest assured, this is going nowhere.