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Amended Internet Tax Ban Will Not Include VoIP
Spritzer writes "Yesterday, the House Judiciary Committee approved an amendment to the Internet Tax Freedom Act of 1998 which would prevent the tax ban from expiring. However, the amendment also eliminates tax protection for VoIP services. 'The amendment, offered by committee Chairman John Conyers Jr., a Michigan Democrat, would extend the ban on Internet access taxes until Nov. 1, 2011. ... The Conyers amendment would allow nine states with Internet access taxes to continue them. It would also narrow the definition of Internet access, excluding services such as VoIP from the tax ban.'"
NOT NO BAN on new taxes, EXCEPT NOT on voip, but NOT after 2011.
Hmm - how does Voice Over Internet Protocol not constitute internet access? Will this then be applicable to things like Skype, and other hybrid (i.e. video/voice/chat) VOIP services that don't resemble POTS so strongly?
The secret to creativity is knowing how to hide your sources. - Albert Einstein
It's all just bits - encrypted bits, if necessary.
If pure VOIP starts getting taxed, then it'll just be adjusted so that it's not technically a VOIP service. E.g. is it VOIP if it includes video? What about in-game voice systems? What if it does some random surfing in the background at the same time? Is a system that sends voice clips via email a VOIP system? What if I'm exchanging music or sound effects - do they count as a 'voice'?
Z.
They want to keep the ban on taxing Internet access but not ban taxing things that you actually use that access for?
Isn't that synonymous with saying "We'll never charge you for this, but if you want to do more than just look at it from across the room, you'll have to pay for the privelage"?
+1 IDisagreeSoHeMustBeATrollOrAnAstroturferOrAShill
The only way to tax VoIP and not other internet services is to go after the companies which offer VoIP services (SIP registrars, POTS gateways). Even though I find it patently absurd to single out one kind of communication service, I imagine that it could lead to less centralized, true end-to-end VoIP ("ENUM"). Companies like Skype and Vonage are only necessary as a temporary bridge while the POTS is still relevant. Except for their function as gateways, they only cause problems.
My guess is they are going after VOIP services that connect you to the POTS network. But if everybody used IP-to-IP phones you could avoid using a taxable VOIP-to-POTS service. It will happen.
What's the point of taxing voip when there's untaxable free voip like Skype out there (and not just).
It just makes business harder for those entrepreneurs trying to offer voip as a solid alternative to land phone lines, you know "voip for the rest of us".
Stupid.
This actually makes sense to me, as much as most of /. will hate it. It means states, and even the feds, can't insert taxes on access or on most things, but it excludes from that ban a service which has a direct analogue in the ... analog world. Taxes on phone services such as the Universal Service Fee go (at least theoretically) to extending access to people that don't have it.
Here's what it really comes down to - as taxes decrease from one source, they must increase from another. The government isn't spending less money, so if less people have phone lines, they must make up the money some other way. Like it or hate it, that's the fact. And yes, this means that eventually, there will probably be an internet sales tax. It's just a matter of what congressmen are willing to be vilified in the eyes of the public, in order to get it done. And if there isn't, it just means income tax (both fed and especially state) must be increased, or some other form of taxation found. Your tax burden in general should never be decreased - it's just a matter of how it's taken from you.
-Daniel
Just like you pays sales tax for anything you buy online in your state, (there is a RL counterpart), access to PSTN should always be taxed. Either that, or standard PSTN based services need to have no tax on them. I'm sure businesses would welcome that, as taxes from varies entities often add 30 or 40% to their bottom line phone bill! I think we would all agree, however, that it needs to be like service, IE connected to the PSTN. IP to IP connections should remain untaxed, as the end users have paid and possibly/probably been taxed for the transport already.
those 0's and 1's are taxable
So now if I set up a Softphone on my laptop and call an Asterisk server at home I can be charged with evading taxes? I mean, isn't VoIP just a set of protocols?
more of the same on Twitter.
they plan to tax voip when you can implement it with open source solutions. no, my mom doesn't know how to do it. but taxes piss people off just enough that the chances of a nicely packaged solution appearing pretty soon are pretty high. get ready for becoming a criminal because you own a compiler.
Any guest worker system is indistinguishable from indentured servitude.
I thought the whole point of taxing individual services was so that the incoming tax money was directly proportional to the outgoing expenses? For whatever reason we needed a tax on POTS, fine. Now, if that tax money is no longer needed to maintain POTS then why do you still need that money for VOIP?! Also, if this shit isn't supposed to matter then why bother breaking the taxes up at all? Why not just increase the income tax? Makes so sense having separate taxes for services that don't actually reflect their usage, even if the goal was to keep the state coffers full.
A bit is just a bit,
A byte is just a byte.
The fundamental things apply,
As packets go by.
Trying to identify bits for their "content" is a little like trying to tell air molecules apart. Congress is now on the same slippery slope as the Bells, who want to charge extra for "premium" content.
Or do they they think the taxes can be collected by the VOIP companies themselves? But what if my VOIP provider is in Outer Elbonia? They have no infrastructure in my state, or any nexus, for that matter. If I pay my phone bill with a credit card or, better yet, by cash deposit on my next trip there, where's the mechanism for enforcement?
Again, Congresspeople, just because something scratches an itch and sounds "fair" doesn't mean it's even a tiny bit workable.
Essentially they put a tax on one service running over an untaxed line. I see where they are headed with this. They won't simply tax your connection, like they did phone lines, no they will tax individual services on that connection. Clever. Next they'll start taxing e-mail, then IM, then streaming video, etc etc....
No sig for you!!
Internet Protocol over VoIP. If we do this, then we won't have to pay an internet tax, right? However, it seems awfully familiar....
The prevailing groupthink tells me that taxes are good, and the internet is good, but taxes on the internet are bad!
That violates the very laws of multiplication, and could threaten the universe as we know it!
"Ask not what your country can do for you." --John F. Kennedy
Internet sales tax is a poison pill that will damn near kill internet businesses. It is not the increased prices that would hurt them but rather keeping track of what to pay to whom. There are over 25,000 different tax jurisdictions in the US alone. I live in the City of Fairfax in Virginia. They have their own 1.5% sales tax. If internet taxing was put into place some one would have to keep track of what tax is applicable to what zip code, be able to assess that for every customer upfront, and then remit possibly 25,000 different payments every month. This could dramatically increase the overhead of larger internet businesses like Amazon, erasing any savings on overhead compared to brick and mortar competitors. For a smaller internet business like Kens Solar, they just simply would shut down because the cost of keeping up with the different tax codes would kill any profits.
The only way internet sales taxes are workable is if the Feds set a flat rate across the board and designated who could collect. If the flat rate was 5% they would need to designate how much went to each interested party (Fed, State, County, City). They would also need to supply a more streamline remittance process because no small company could process or keep track of where their tax collections needed to go. My guess is Verisign may be the company to handle something like that.
This marks a particularly sad moment in the history of News for Nerds political activism.
While I agree that specifically allowing taxation of voip "for which there is a charge" (the language in the actual law) is a bad idea, it was a bad idea back in 2003 when it was included in the LAST internet tax renewal that became law. The voip language in the current bill is just a restatement of what has been law for 4 years. The fact that an editor here, particularly an editor who feels comfortable passing on political stories, is ignorant of a pretty important provision in one of the most prominent pieces of technology legislation (and a one page piece of legislation at that) does not give a lot of aid and comfort to those who support the tech community on these issues.
Now, if you want to complain about something, this new House bill, and the one currently in the Senate Commerce committee (Not the Wyden (author of the original internet tax ban) Senate bill S.156, or Eshoo House bill H.743) both include a revised definition that specifically only covers services offered by ISPs, opening up non-isp web services (net radio, youtube, joost) to taxation. Big surprise, these narrower definitions are the ones championed by Verizon and ATT and the now ironically named "don't tax the web" coalition.
THE YEAR WAS 2081, and everybody was finally equal...
finally someone gets the jest of it. this article proves just how dumb so many slashdot users are. it's pathetic to see what some people have come up with as a solution. it proves that they didn't even understand the problem.
it's getting really lame around here.
VOIP is passed out in the corner; Online Video is ordering shots for Online Retailers -- they won't last long. State Legislator is pissed that he was not invited and has called the cops to shut this party down.
may not be the next step, but it is an eventual one. But how do you know how much to tax an email? Simple. By the number of characters, which in turn will lead to shorter emails and shorthand and before you know it it'll be like just like text messaging and the telegraph.
I was going to say that I agree with you that the dramatic number of tax jurisdictions would make tracking internet tax very difficult... but the more that I think about it, the more I disagree.
First: Software to track taxes already exists, because of sales tax - big companies that have locations in many places already have to track this. It isn't as extensive as full internet tax would need to be (assuming every jurisdiction passes one, which is unlikely, but who knows) but the software would grow with the need. Yes, payment would be a bitch, I can't argue that.
Second: I do agree a flat rate across the board makes a lot of sense.
Third: Why is erasing some of the advantage of an internet business a bad thing? Personally, I'd love to see brick and mortar be able to be more competitive. How many of us abuse brick and mortar stores by going in, looking at things, then ordering them online for a few bucks (or a lot of bucks) savings? That's not fair to the b&m. Further, if it gets bad enough (and it is pretty bad), b&m's start shutting down, and then we really have nowhere to go. You may not lament the loss of these "rip off" stores, but when you want to go look at something and have nowhere to go, it's a serious problem. I'm not sad if internet companies have more overhead. Not to mention that b&m's have to charge you taxes, so why shouldn't net companies?
-Daniel
It is a little more complicated than that. The way b&m Stores work is that for each location they determine what tax jurisdictions apply to them and that individual store applies those taxes to each purchase at that location. Retail software is designed that way. An internet business can not apply that same system unless there was a flat tax. You would have to do a zip code to tax jurisdiction match for every single purchase which is not as easy as it sounds. It requires a lot of research and in the end, even if you contract it out, you would have to do that on the fly on the web page. That would get expensive enough, but the problem is that your biggest issue would actually be remitting all of those taxes. Take a mid sized internet business like www.thinkgeek.com... do you think they have the resources in place to keep track of what remittances need to be sent where and get them all out?
John Conyers Jr. is a wennie who is NEVER to be believed when it comes to tax cuts or bans. I condemn the tiny district that continually re-elects him, and inflicts him on the rest of us!
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
I guess the only way to make Michigan's tax environment look better is to make everyone else's tax environment look just as bad.
Since Conyer's district is full of UAW workers, you guys should NOT be surprised by this. Don't you see the news with the UAW striking over stupid things like the jobs bank, "scheduled" overtime, and job security guarantees.
Buy more 'merican cars and you won't have to worry about this!!!!
If your VoIP is distinguishable from other low-latency-QoS traffic, you're doing it wrong. If you have any sort of centralized "provider" (other than maybe a jabber server for cases where a direct P2P connection can't be made), you're doing it wrong. If someone other than a general-purpose ISP is billing you for the packets that just happen to be the building blocks of your VoIP, you're doing it wrong. If it's possible for someone to measure it and tax it (or tap it and see anything other than cipertext), you're doing it wrong.
Of course, doing it wrong happens to be the norm, right now. I'm doing it wrong, too. We need new phone protocols, and interfacing with the POTS system needs to become an exception.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
> Why?
http://www.brillig.com/debt_clock/
Any more questions?
This is actually another attempt by the RIAA to screw people that download Mp3's.
Think about it.
(I think it's been far too long between stories since someone has taken a jab at them)
Your "net" under what calculation? Excluding your 401K contributions? Before or after your donations to the Social Security scheme? Including the amount your employer spends on your health insurance? Excluding expense reimbursements, but including work-related expenditures?
Flat-taxes are one part of the solution, but not as big a part as people imagine. First you need a consistent way of calculating "net" that is fair, that applies to all income brackets equally, and that encourages wealth formation.
Reforms like this will never get passed, though. This is because (among other things) they make it harder for the government to obfuscate your real tax burden, they make it harder for them to obfuscate wealth-transfers, and special interest groups have little trouble convincing great numbers of people that they'll take it in the kiester under a flat tax. (That's easy to do; just measure "fairness" as if the current graduated system were a baseline for fairness. Don't account for the loopholes of the current system in your comparison though. That way you can tell the lower-income guy that his tax will go from 15% to 17% while the rich guy's will go from 35% to 17%, and he'll get righteously pissed. Don't mention the leveling of deduction loopholes, or secondary economic effects on standard of living; he's too much of a simpleton to understand the rest of the details anyway.)
It's like the doomed attempt of 7 years ago to give citizens a modicum of control over their own Social Security accounts: People actually marched on Washington demanding that this plan be defeated to keep their SSI "safe". So in order to prevent a possible decline of a small percentage of one's retirement income that they would have ownership of, what did they demand? That's right, to keep it in a program where there would be a definite decline in their retirement income, and where they would have ownership of none of it.
I hate to be cynical, but in a country where arguments like that can kill an initiative to reform a doomed Ponzi scheme, what hope is there for truth in taxation?
Pi Ran Out
Now that Vonage bill, which was originally $15, and has crept up to about $20 due to various fees, will probably end up being just as much as a similar regular landline once they start taxing the crap out of it. Was a good thing while it lasted.
"Your tax burden in general should never be decreased - it's just a matter of how it's taken from you."
I heartily disagree with that.
I've watched the taxes and fees on my VoIP service from Vonage go from $2.00 a month to $9.00 a month.
Here's my question - since Vonage is a broadband only service why do I have to pay an FUSF charge, while on Skype I don't. Interesting isn't it.
About the VOIP tax: is it applied where the call originates or where it is terminated. I'm thinking particularly about the SkypeOut service which I use regularly. I pay an annual fee, and I get unlimited calls within the continental U.S. and Canada. Here's the catch: I live in Canada, so would a new VOIP tax apply to me? Is it added to the annual fee, or would Skype have to start charging a tax on each call? If calls aren't charged based on the destination, how exactly are they charged? Is it based on whatever state you happen to be in when you sign up for the annual plan? Is there even a way for them to know what state that happens to be? Is it based on the billing address of your credit card? (I have a card whose bills are sent to a PO box in another state.) How will this work?
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
On the other hand, while Democrats mostly don't like non-progressive taxes, most of the support for it I've seen hasn't been from the ultra-rich - it's middle-class and small-business types, who realize that they're paying the bulk of the taxes in this country and imagine that this will somehow help it. Democrats do like taxing businesses instead of people, ignoring the fact that the money really comes from people's incomes, either directly by reducing dividends to stockholders (so you could get the same money from them by taxing their income instead of the corporations) or indirectly by raising the prices of the products the corporation sells (which might be progressive or regressive depending on what kinds of products they sell, or just extra-well-hidden if their products are mainly sold to other businesses.)
The real problem is that if the government spends as much money as it wants to (and given Democratic social-welfare spending, Bush's rabid military spending, Social Security that nobody wants to admit to touching and which will grow rapidly as boomers retire and people live longer, and everybody's pork and bureaucracy), then there's no way to get all that money except through proportional or progressive income taxes, because otherwise the tax would be higher than poor people's incomes. Current Federal spending is about $2trillion/year, which is about $10,000 per adult, plus there's state spending (California's about $5000/adult) and catching up on the debt which _will_ eventually have to happen. Obviously before you get close to 100% of their incomes, you'd have massive numbers of people homeless on the streets, starving children, and a revolution, so that's not going to happen - so we're not going to fund the entire budget from a consumption tax, or even get close to it.
The "Fair Tax" advocates generally say that they don't like any kinds of taxes but that they'd be happier trading the income tax for a "fair" sales tax - but even if the Federal budget were radically reduced, the tax would get introduced as a phased-in "transitional" measure and you'd find that the income tax wouldn't ever go away. In practice, we'd probably end up with a 15-20% consumption tax like Europe's VAT or Canada's GST, plus an income tax that's almost as high as today's. The only real alternative would be a much higher consumption tax plus corporate taxes that amount to an income tax on stockholders and a sales tax on customers, which would be even worse for the economy. And your privacy would get the double-whammy as well, because you'd have data collected on your purchases as well as your income, and a lot more invasive auditing than current sales-tax auditing.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
Tm
Support TBI Research: http://www.raisinhope.org
As much as BushCo and the Republicans ballooned the government and borrowed, Democrats seem to be hell bent on raising taxes like no tomorrow. Not only do we have a tax increases for VoIP from this bill, but their so-called "childrens bill" would have raised cigarette taxes almost 60 cents a pack. Then, you have the looming expiration of the original tax cuts, the global warming tax increase (50 cents a gallon on gasoline, at least, plus an end to the mortgage interest deduction if your house is too big), then, you really, wind up, in total, with potentially the largest increase in taxes since Johnson was president.
All the Democrats had to do is keep taxes roughly the same, perhaps cut defense spending a bit, and quit the war in Iraq, the budget would be balanced, and they could claim the mantel of fiscal responsibility. But instead, they are going to raise taxes, spend on a ton of social programs, make it illegal to make fun of gender benders in the workplace... it's just silly. Right now, there are some Democrats arguing that they need to have someone run up against Barney Frank because he isn't gay enough... I mean, how crazy is that.
IT's like the only hope we Republicans have, is that Democrats would out-stupid us..., and honestly, the way we ran congress since 2000, that's pretty hard to do. But, Pelosi and Reid sure are making a good run for it. Oh yeah, raise taxes, go after gun owners and then make gender benders sacred cows... and that would just about hand the House back to us in 2010.
This is my sig.
No where in the Constitution is the Federal government allowed to regulate communications.
Libertas in infinitum
i hope my 19.2kbps connection isnt taxed the same as someone with 10 meg a second. i would be outraged. and if its an email tax, ill jsut use a foreign email service...
should be sorta like sales tax, pay for what you get, and such. tax my 19.2kbps 19.2 cents, and someones 268923700.0kpbs $268923.74
that would be fair, right?
or is dialup exempt because its so exasperatingly slow?
tick
'ask not what your country can do for you, ask what you country has done to you' antiflag