Elsewhere this week, I talked about the inability to put the genie back into the bottle, the slippery slope that once a word is spoken it can never be unspoken. Here’s another story about that same concept.
A quick poll. How many of you believe that once a governing body discovers a new tax, they will set that tax concept aside, never to be used again? Assuming I could look through your radio or computer, (which I can’t, I promise) I am confident I would see no hands up in the air. It doesn’t matter where you place yourself on the political spectrum; we are all pretty cynical when it comes to governments and taxes. Once they discover a tax concept, it will get used, somehow, someway, somewhen.
For the moment, a tax idea in the great state of California has been placed on hold. The California Public Utilities Commission (the CPUC) had planned to implement a new tax on texts last week. The final vote was on the calendar for January 10. The idea was to add a monthly fee onto the wireless bills of the citizens of the state to raise money to improve connectivity in under-served areas.
I am sure you won’t be surprised that the idea was met with divided opinions. The telecommunications industry was a loud voice in challenging the idea. Their top complaint was that the regulation would only cover cellular providers, but not services like WhatsApp or iMessage. That placed an unfair competitive burden on the industry.
So what made the regulators drop the tax plan? In December of last year the Federal Communications Commission, (the FCC) ruled that text messages were not a telecommunications service but rather and information service. As such, they did not properly fall under the regulatory oversight of the CPUC. With that federal ruling in place, the state commission couldn’t see their way forward. To enact the regulation after that federal decision would have sent it to the courts, which likely would have struck it down.
That’s all well and good. But it takes us back to the original concept. They may not pass the tax this time and in this manner. But it seems inevitable that the topic will come up again. It’s an extension of the wrangle over taxing purchases made online. As we spend more time using these kinds of services, regulators and taxing authorities will eye them as a source of revenue in the future.
Because once that camel gets its nose under the tent flap…well you know the rest.
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