[From Congressman Bob Goodlatte]
A quick look at the numerous taxes on your phone bill for phone service will give you a pretty good idea of what could happen to the cost of internet access. The continued growth of the Internet has brought tremendous improvement to our lives from advances in medical research to the ability to communicate with loved ones located thousands of miles away. While the benefits of this technology continue to increase, we must ensure that the Internet remains free from the burdens of new taxation and accessible for all Americans.
The Internet Tax Fairness Act of 1998 created a temporary moratorium on state and local Internet access taxes. As a result of this moratorium, the Internet has remained relatively free from the burdens of new taxes. The moratorium has been extended on numerous occasions but is set to expire in November, subjecting the Internet to possible taxation from more than 7,500 taxing jurisdictions.
Earlier this year, I introduced bipartisan legislation, the Permanent Internet Tax Freedom Act, which would help keep the cost of purchasing Internet access as low as possible for all Americans by permanently preventing the confusing taxes on consumers’ telephone bills from being repeated on their bills for Internet service. Unfortunately, this legislation was not brought before the full House of Representatives for a vote. Instead the Congress passed legislation that only extends the moratorium.
While I supported this temporary extension and believe it is a step in the right direction, I was disappointed that the bill only extended the moratorium for four additional years, rather than making it permanent. A permanent ban would create the tax certainty that Internet access providers need to decide to make the investment to extend their broadband services to more rural and suburban areas and inner cities that they do not currently serve.
In addition, a permanent moratorium will help to bridge the digital divide between those who can afford Internet access and those who cannot. It is estimated that only 11% of U.S. households with incomes of less than $30,000 have high-speed Internet service, as opposed to 61% of households with incomes over $100,000. Taxes on Internet access will increase the costs of households going on-line, as the prices for providing Internet access service increase. Without a permanent moratorium on Internet access taxes the digital divide between those who can afford to go online and those who cannot will become greater.
From families to mom-and-pop stores on Main Street, to large corporations, to online businesses – any business or individual who purchases Internet access will benefit from a permanent ban on excessive government taxation. Rest assured I will continue working to preserve consumer choice, low taxation, and the openness which has characterized the Internet to date, ensuring that the Internet will continue thriving and that access to the Internet is affordable for all Americans.