Big Business 1, Truth 0
The "Internet Tax Freedom Act," which provided a temporary moratorium on Internet access taxes, but had a grandfather clause allowing existing taxes to continue, expired November 1, 2003. During the last congressional session, the House passed "The Internet Tax Non-discrimination Act" (H.R. 49) to deal with the law's expiration...Rather than a simple continuation of the original moratorium on the taxation of Internet access, the proposed legislation would...make the moratorium on taxation of sales of "Internet access" services permanent.
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The full impact on state and local government revenue is impossible to estimate, since the interpretation of "telecommunications services used to provide Internet access" is so broad and ill defined. The telecommunications industry will certainly argue for the widest possible interpretation. The elimination of the grandfather clause would cost the 11 states and local governments from between $80 million and $120 million annually. The loss of the ability to tax DSL would cost those states and localities about $70 million annually.
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Supporters of the legislation argue that taxes on Internet access exacerbate the so-called "digital divide." ...It is far more likely that cuts in the services that state and local government provide, like Internet access or training at libraries and schools, made because of inadequate state and local revenue, will increase the digital divide.
For a full examination of this issue, see the Center on Budget and Policy Priorities analysis.
For a full rant about how big business needs to quit pretending its decisions are all about the well-being of the poor, see yours truly.
