A member of Congress averages an annual salary of $154,000, which means it costs taxpayers roughly $60,000 an hour (plus expenses) for their elected politicians to meet. When the Senate and the House of Representatives debate silly stuff—like an anti-spam bill that is not enforceable or legislation against porn on the Internet that is unconstitutional—my money is wasted by a bunch of grandstanders looking to garner points for their re-election. Let’s face it, everything in the life of a free society with a free economy is driven by one thing—money. Money is the great leveler.
By the time this column sees print, Congress will have passed an anti-spam bill. The question of the Internet tax moratorium will probably have been dealt with, too.
On Oct. 21, 1998, the Internet Taxation Freedom Act (IFTA) took effect. It imposed a moratorium on federal and state taxation of all Internet transactions. After a two-year extension, the bill expired on Nov. 1, 2003. Bowing to immense pressure from all sides, the Senate was about to make the ban permanent. Then two GOP Senators—Lamar Alexander of Tennessee and George Voinovich of Ohio—reared up and, in the words of The Wall Street Journal, used “procedural legerdemain to prevent a vote on the Internet Tax Nondiscrimination Act, a provision that not only keeps the taxman away from your AOL and EarthLink account but also bans ‘multiple or discriminatory’ levies on electronic commerce.”
I just looked at my September Verizon/MCI and AT&T phone bills, and I am taxed a total of $13.12 in federal, state and local taxes plus access fees for my home phone and the mobile phones my wife and I use.
So there is precedent for a tax on this new communications medium. What would a tax of 2 cents per e-mail mean?
First off, it would impose some financial restraints on the spammers. The arithmetic now for a spammer is profitability on four or five orders per 10 million spam messages. A 2-cents per e-mail tax (say, split evenly between federal and state governments) would mean spammers who sent out 10 million messages would pay $200,000 in taxes. Gee, that would certainly crimp their style and make them look at ROI the way legitimate direct marketers do.