Federal Affairs Manager at Americans for Tax Reform and Executive Director of Digital Liberty Katie McAuliffe discusses why the Senate must pass legislation that bans Internet taxes forever in an Op-ed for The Daily Caller.
“This week, Senators have the opportunity to stand up for Internet freedom and vote to keep the Internet Tax Freedom Forever (ITFFA) provision in the customs bill. A vote against ITFFA is a vote against the Internet.
In 1998, the Internet Tax Moratorium was enacted to ensure tax-free Internet access by preventing state and local governments from taxing Internet access or implementing discriminatory taxes on electronic commerce. Unfortunately, a few states were able to pass access taxes before the ban was enacted, and the ban is not permanent. Lawmakers reauthorized the Internet Tax Moratorium more than half-a-dozen times since its initial passage.”
McAuliffe goes on to explain how applying an Internet access tax when broadband Internet was first introduced into the market would have had disastrous effects.
“The consequences of imposing taxes on Internet access would have been detrimental to the adoption rate of broadband Internet access. To put it incredibly simply, tax on broadband Internet access increases the cost of consumer adoption. With an increased cost (particularly on an unfamiliar service) consumer demand stays low. However, lower costs lead to higher demand. Taxes on Internet access, as consumers moved to broadband, would have slowed the rate of “upgrade” adoption, which, in turn, would limit service providers’ ability to launch in and upgrade in different markets. Hence, broadband introduction into some markets would have been delayed.”
Fortunately for consumers and for the technological age Internet access has been kept tax free in most states allowing broadband access to spread to markets all over without consumers barring burdensome prices.
Now it is up to the Senate to recognize the necessity of keeping Internet access tax free by voting to make the ban on taxing Internet access permanent once and for all.