To tax or not to tax... or not to tax yet.
After reading and thinking about the questions posed in this article by Declan McCullagh, I offer the following thoughts:
It is inevitable that the government will find a way to tax the internet. Whether it is a tax on our connection, purchases, etc., the government will find a way. Collecting taxes on purchases made from a company that currently does business in the state where the purchase is being made is reasonable, considering you would pay taxes on the item if you walked into the store to make the purchase.
The internet is still in its youth, at least the internet as we know it today. It has revolutionized the way we do business, travel, educate, and entertain and has the potential to continue to do so. The list of benefits could go on and on. My bread and butter is web development and has been for the last five years.
Anything that will stifle innovation is a bad thing, such as a tax on the Internet right now. Here is an example. Recently I signed up for Verizon's DSL combo package. I get DSL service for $35 and unlimited local/long distance for $49.99 per month. My average bill is far higher than the expected $84.99 + disclosed taxes. There are hidden taxes and fees that were lumped together that totaled more than $23 dollars (I do not have the exact figure in front of me). When I called Verizon and asked them why this information was not disclosed, they could not give me an answer other than it was additional government imposed taxes and fees. Had I known about these additional taxes and fees, I would have rethought the combo package and might have stuck with the service I had.
Tacking another tax (probably will join the non-disclosed group) on to the above example could influence a consumers decision when selecting dial-up or high speed service. Web applications are continuously increasing connection requirements. What if consumers decide to stick with a slow internet connection to avoid the additional taxes? The bandwidth craving web applications would be slow and would ultimately affect the user’s web experience and possibly online purchases.
You might say that consumers should just suck it up and get a fast connection if they wish to enjoy the internet. I think technology will eventually force people in that direction, but taxes will surely slow things down.
What do you think? I'm sure I opened up a can of worms here...