California Considers Text Messaging Tax To Fund Cell Service For Low-Income Residents (thehill.com)

According to a report from the California Public Utilities Commission (CPUC), California may soon tax text messaging to help fund programs that make phone service available for low-income residents. The report says the tax would likely be a flat fee added to a monthly bill instead of a per text tax. The Hill reports: The report outlines the shrinking revenue coming from a current tax on the telecommunications industry and argues that a new tax on text messaging should be put in place to make up for it. "From a consumer's point of view, surcharges may be a wash, because if more surcharge revenues come from texting services, less would be needed from voice services," CPUC spokeswoman Constance Gordon said in a statement. "Generally, those consumers who create greater texting revenues may pay a bit more, whereas consumers using more voice services may pay less." "Parties supporting the collection of surcharges on text messaging revenue argue that it will help preserve and advance universal service by increasing the revenue base upon which Public Purpose Programs rely. We agree," the report states. The CTIA, a trade association representing major carriers in the wireless industry, says the tax is anti-competitive and would put carriers at a disadvantage against social media messaging apps from tech companies such as Google and Facebook. The CPUC is expected to vote on the proposal in January 2019.

Comments

Nobody texts anymore, gramps

[nospam007]

The iPhone crowd have their own messaging system and the rest uses whatsapp et al.

If the tax gets through, the latter will be used by everyone.

Re:Nobody texts anymore, gramps

[Anonymous Coward]

If by "Nobody" you mean "95% of people" then.. I guess? It always amuses me how out of touch people are with reality.

"Hey guise, nobody uses credit cards anymore, it's all BITCOIN!!!!". Sure.

Re:Nobody texts anymore, gramps

[omnichad]

And those same services can be used on a phone without a plan. Or a tablet. Or a PC with a web browser. How do you tax that?

Re:Nobody texts anymore, gramps

[omnichad]

So then people will demand plans without texting.

Re:Nobody texts anymore, gramps

[saider]

I can see someone making a "game" that has a chat feature, just to dodge the tax.

This will be an endless cat and mouse game between developers and regulators. I look forward to the hilarious shenanigans that will follow.

Re:Nobody texts anymore, gramps

[saider]

This idea is hilarious. Tax text messages to pay for phones for the poor, who will then use it to send text messages! This is the government equivalent of a perpetual motion machine.

This is like the lottery, or a tax on milk. It will hit the people it is trying to serve much harder than "the rich".

Re:Nobody texts anymore, gramps

[Anubis IV]

I assume the tax would apply to those services as well. Generally legislation isn't specific as to which service you use.

How's that supposed to work? The two aren't anything alike.

They operate over different networks (cellular vs. cellular, WiFi, and wired). They operate on cellular via different channels (dedicated vs. general purpose). They differ in security (not encrypted vs. end-to-end encrypted). They require different hardware (SIM vs. any Internet connection). They operate on different classes of devices (phones and SIM-equipped laptops/tablets vs. PCs, phones, tablets, and MP3 players). The natively support differing numbers of devices per user (one per user vs. many per user). They natively support different content (texts alone vs. texts + effects, audio/video, typing notifications, tap backs, read receipts, stickers, money, hand drawings, etc.).

And that's all before we even get to the most obvious problem: one costs the end user a monthly fee just to use it, the other doesn't cost anything. Collecting a tax on $0 is a fool's errand.

I'd shudder to think how legislators would define the law in such a way that it could apply to those services in any sort of reasonable way. Aside from how they are visually presented to end users, there's really no similarity at all between iMessages/WhatsApp and standard SMS texting. If anything, the former bears more resemblance to instant messaging than it does to SMS texting. How are legislators supposed to draw a line that puts iMessage/WhatsApp on the same side as SMS without also including IRC, Slack, Facebook Messenger, Google app of the month, e-mail, or really just about any other form of asynchronous communication, free or otherwise?

A user may think that the only difference is that one is a green bubble and the other is blue, but the actual differences are vast.

Re:Nobody texts anymore, gramps

[bws111]

Yeah, it says that. It also says "consumers who create more text revenue" will pay more. Then again, it also says the purpose is to increase revenue, while also claiming people won't be paying more. The whole thing is full of California-speak.

Re:Nobody texts anymore, gramps

[rogoshen1]

I didn't know having a cell phone was a basic human need that government should be getting involved with.

If you really need a mobile phone pick up a cheap ass tracfone and do the prepaid thing. Mommy government doesn't need to be buying everyone an iphone -- and taxing the rest of us to fund the little feel goods.

Re:Nobody texts anymore, gramps

[ljw1004]

This idea is hilarious. Tax text messages to pay for phones for the poor, who will then use it to send text messages! This is the government equivalent of a perpetual motion machine... It will hit the people it is trying to serve much harder than "the rich".

It's only like a perpetual motion machine if the exact same people receive benefits who are being taxed. But if (as in the plan) more people get taxed and fewer get the benefits, then it's just bog-standard redistributive taxation and unrelated to perpetual motion.

If it hits one group of people harder than another, that's another way of saying that it's like a perpetual motion machine.

The only way it can hit the people it's serving harder than "the rich" is if the benefits that people get (subsidized phones) have a value less than the surcharge they pay on their bill. That seems vanishingly unlikely.

I think it's much more likely to hurt most the people just slightly better off than those it's trying to serve.

Re: Nobody texts anymore, gramps

[cayenne8]

Travel outside of the US much/ever?

No, like most Americans, I have no need to travel outside the US, PLENTY to do here....hell, most of us don't even have a passport.

I have traveled to Europe before, MX and the caribbean....but last time out was years and years ago.

I really don't see much of anything compelling that would tempt me for foreign travel, hell, there's so much to do and so many places to see in the US that I'll never get close to them all in the rest of my lifetime.

Re:Nobody texts anymore, gramps

[quenda]

I didn't know having a cell phone was a basic human need that government should be getting involved with.

Communications is a basic need to function in modern society, and governments have been involved in that since Henry VIII.
Governments subsidised where needed postal, and later phone services, to cover their countries.
Now in the 21st century, cellular service has become much cheaper than fixed lines to provide, so it makes sense to stop mandating cheap rural fixed-line services, and replace them with cellular. Also, telcos are not allowed to charge more in small towns than in the city. None of this cross subsidy is new.

But this California proposal makes no sense. Why create another micro-tax? Do you have a separate tax for each spending program? Thats ridiculous.
In Australia we pay A$10 (us$7)/month for unlimited calls and 1-2 GB of data. UK is similar. Even homeless people have cellphones. What does a basic service cost in the US?

Re:Nobody texts anymore, gramps

[ShanghaiBill]

I didn't know having a cell phone was a basic human need that government should be getting involved with.

A phone is not a basic right, but having one can turn a poor person's life around. They have a number to put on a job application form, they can talk to friends, find out about opportunities, call for help, etc.

But this proposal is a bad idea in a much deeper way: We should NEVER has specific taxes targeted toward specific purposes. It is always a bad idea. The decision on what to tax should be made completely independently of the decisions of what to spend it on. All taxes should go into one pool.

One consequence of tax-spend bundles is exactly the problem described in TFA. Money for the subsidies is coming up short because they come from a source that is declining.

A bigger problem is that stupid taxes are pushed through because the money is "for education" or "helping Vietnam amputees" or whatever. If these spending programs are really so important, then we should fund them out of sensible general taxation, and if necessary, raise those taxes.

Re:Nobody texts anymore, gramps

[The Grim Reefer]

Poor people having phones saves the government money.Â

If that was the case, then why do they need a tax to pay for the phones? Shouldn't they send the phones to those who need them and cut taxes with all of the savings?

Because what better way to fund services

[rsilvergun]

for low income residences than with a regressive tax that disproportionately impacts the working class, including the working poor.

Seriously, in 2018 does anyone still fall for this crap? It's like when they rebranded trickle down economics as "Tax cuts for Job Creators" and left out the fact that "Job Creators" don't pay taxes when they invest in their companies...

Better idea

[grasshoppa]

Let's tax every stupid idea a politician has. 1 cent per.

We'd be able to pay off the national debt before the end of the year.

subsidizing? wtf

[ahodgson]

You can have a prepaid cell in California for $12/month. No one needs subsidizing. End the subsidizing and you don't need a new tax. ffs.

Re:subsidizing? wtf

[Dan East]

Yes, but politicians get more votes from low-income residents when they give low-income residents things totally for free. When someone buys a $12 prepaid card a politician can't get the credit for it. When a politician pushes a law that gives phone service away totally for free, that will buy them votes.

Re: subsidizing? wtf

[misnohmer]

Remember, every government program is an opportunity for people to skim, grant contracts to friends and family or for kickbacks in one form or another. Maybe you have a family member who needs a job, why not hire them to administer some new program and of course pay for the job it of the same pool of taxes collected for that program.

New game: The Onion or California?

[raymorris]

Let's play a game. Somebody posts a news story and the rest of us try to guess whether it comes from the Onion or from California.

That could be a very challenging game.

Okay, okay - I know someone reading this probably *likes* California, and doesn't think California politics is ridiculous. That's cool. Thanks to Article 1 of the Constitution, the rest of us aren't allowed to tell you how to live. California can have whatever laws you all want. Just in case anyone forgets to read Article 1, the framers repeated it in the 10th Amendment:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

So don't worry. Even though I think you guys are a parody of yourselves, I'm not going to try to stop you, I can't stop you. You can tax blinking if you want to.

Re:New game: The Onion or California?

[Notabadguy]

Taxes are cornerstones of modern society, particularly ones that are used to fund things for the disadvantaged.

Sorry you hate people, be sure to bring that up with your god when you're at the gates, he'll totally understand.

I'm sure you've heard that all taxes are regressive, and bureaucracy propagates bureaucracy. If a government can demonstrate fiscal austerity, responsible spending, and minimal waste on grossly negligent pork products and needs to increase taxation to raise revenue...alright.

You assume that governments automatically know what is best. They don't. You accept that if the government says it needs more money, the first response should be for them to steal more of everyone's money instead of auditing their spending for waste. Have you ever SEEN a CBO report? On how grossly wasteful and financially irresponsible virtually every aspect of our government is?

It isn't people-hating to question bureaucracy, it is civil duty - and while civic responsibility is a pipe-dream in America now, the only people hating is YOU. You hate people so much that you think the government should take their money unquestioned.

Lies from the get-go to get new tax in the door

[misnohmer]

1. If it's going to be a wash because they will lower voice service taxes, why bother, just take a portion of voice service taxes - unless somehow California has separate governments for voice and text services.

2. How do I reconcile those two statements:
"The report says the tax would likely be a flat fee added to a monthly bill instead of a per text tax."
"consumers who create greater texting revenues may pay a bit more"
If the tax is flat, how to consumers who create greater texting revenue pay more? Did they not think it through, or just telling people whatever they want to hear?.

This is straight from the government "How to get some more money to skim from" handbook - ask for a new tax, make it small do people don't think it matters, tell everyone what they want to hear, get sufficient approval (or indifference) from the public to add the new tax, wait a year, increase the new tax, award new contracts to people who now owe you. After all, six taxes at 4% each don't seem as bad as one at 24%, right?

Re: Taxation is theft

[omnichad]

Try getting a job when no one can follow up with a phone call.

No, because texting is usually free

[rsilvergun]

data isn't. So if you have a pricey plan and an iPhone you won't notice this in the slightest. If you've got a cheap subsidized burner phone it'll hit you hard. You'll have to choose between texting and doing your homework. A lot of regressives like that choice.

There's a sizable group of people in this country that want poor people to suffer. The idea is that their suffering will encourage them to stop being so damn poor. Now, virtually all research on the topic shows that pressure does not in fact make diamonds, and instead the stress from constantly being screwed and the mental gymnastics poor folks do calculating every little nickle and dime stolen from them exhausts them and leads to poor decision making, but that's not the point. Some folks just want somebody else to have it worse them them, and they don't care how that happens.