This week the
House of Representatives is scheduled to vote on the Permanent
Internet Tax Act (HR 235), which would ban state and local taxes on
Internet access.
The current ban on
Internet access taxes has been extended many times since it originated in 1998
(and is set to expire once again on October 1, 2015). But if this legislation
passes, the ban would become permanent and discriminatory taxes on e-commerce
would also be prohibited, according to this article in The Hill.
It is
very important for consumers and Internet Service Providers that the House pass
this legislation. Taxes imposed on any good or service
raise the price, resulting in a decrease in the quantity demanded from
consumers. Whether taxes are shifted on consumers or businesses, the
elasticity of demand and supply allows for both sides of the market to inherit
the burden, ultimately leading to less economic activity and growth.
Taxes on Internet access would be particularly
regressive because it is often the poorest people that do not connect to the
Internet. A tax on Internet access could push the price of broadband
beyond many of the poorest consumers’ willingness to pay. Even if a
person had not adopted broadband service prior to the tax being levied, the
increase in price would make that person less likely to adopt. Raising the
price of an Internet access would be counterproductive to the many government
programs that aim to connect America’s poorest individuals.
I commend Judiciary
Committee Chairman Bob Goodlatte for introducing the Permanent Internet Tax
Freedom Act and I urge the House to pass it.
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