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.
And how about all our nitwit acquaintances who see or hear a joke and send this silly stuff out to 75 of their nearest and dearest friends? Suddenly the jokesters would have to ask themselves: Is this joke so funny that I can afford $1.50 to send it to all my friends?
I send maybe 25 to 50 e-mails a day. I would happily pay a buck a day in taxes to eliminate spam.
But how about businesses that send e-mails by the ton? Obviously taxes would not be levied on inter-office correspondence. Even so, corporations would argue, taxing outgoing e-mails would mean extra expenses that would hurt the bottom line.
OK, let’s look at the flip side. I am on AOL, which has a sophisticated spam-filter system, so I do not get tons of spam. (AOL’s system is almost too good in that it also filters out e-mails I should be getting—but that is a different subject.)
When my wife, Peggy, vice president/group publisher of the Target Marketing Group, comes in from a road trip, she has to spend an hour dealing with more than 500 e-mails in her work in-box, of which maybe 480 are spam. On average, she probably spends an hour a week clearing spam from her in-box. Eliminate spam, and Peggy’s company has gained an extra week of Peggy’s time. That’s big bucks.
Hackers and technogeeks can figure out ways to get around lawsuits against spam. The money isn’t there to enforce those laws. Spammers who got caught would hire high-priced lawyers to appeal the law all the way up to the Supreme Court, which would no doubt strike it down as an abridgment of the First Amendment right of free speech.
With a multibillion-dollar pot of tax money—some to the feds, some to the states and some to the IRS to make damn sure everyone who sent an e-mail paid that 2-cent tax—you could kiss spam good-bye.
Denny Hatch is the author of: “PRICELINE.COM: A Layman’s Guide to Manipulating the Media,” “Method Marketing,” “Million Dollar Mailings” and (with Don Jackson) “2,239 Tested Secrets for Direct Marketing Success.” He is a freelance direct marketing consultant, writer and designer. Hatch can be reached at email@example.com; or visit any of his Web sites: www.jackcorbett.com, www.methodmarketing.com, www.pricelineandthemedia.com.