You will have to pay more for your internet access if Congress doesn’t act in 64 days.
One of the reasons that the internet has been such a boon—to small entrepreneurs and big companies alike (not to mention those who merely want to communicate via email)—is that it is cheap.
That will change if the Internet Tax Freedom Act, which has made the internet available to us so inexpensively, expires at midnight on December 11. It will expire unless Congress takes action.
A new study, cited in today’s Wall Street Journal, by Douglas Holtz-Eakin’s American Action Forum puts internet taxes at $14 billion if the tax freedom law expires. You will be paying some of that. Greedy taxing authorities will spring into action:
The study’s estimate of $14.7 billion in annual taxes assumes that, without the federal moratorium, states and localities would apply to Internet connections the same levies they now apply to telecommunications.
And a heavy burden it is. On Wednesday the Tax Foundation reported that Americans are now paying an average rate of more than 17% in combined federal, state and local taxes and fees on wireless services. The foundation adds that “the average rates of taxes and fees on wireless telephone services are more than two times higher than the average sales tax rates that apply to most other taxable goods and services.” Taxes on traditional wired phones are similarly punitive.
The internet has been a great engine of growth. Democrats in Congress, however, not content with the low level of productivity we see in the economy now, partly the result of making it hard for neophyte entrepreneurs to go into business, want to make things worse. Prepare to pay more for your internet if this bill doesn’t come to the floor (Senator Harry Reid has kept it from being voted on so far) and get a yea vote.