Editor’s Note: The following is a guest post by Ken McEldowney, executive director of Consumer Action, a non-profit 501(c)(3) organization focusing on consumer education and advocacy to empower low- and moderate-income and limited-English-speaking consumers to financially prosper.
Consumers beware: the cost of Internet on our smartphones, tablets, and home Wi-Fi could go up November 1st if the Senate does not act.
Since 1996, the Internet Tax Freedom Act (ITFA) has prevented most states and municipalities from taxing Internet access to encourage Internet adoption and use. ITFA is set to expire on November 1st, and, if not extended by Congress, it could mean a tax hike for Internet users.
Access to the Internet offers consumers a gateway to endless information, educational resources, and economic opportunities, regardless of race, income, or geography. The accessibility of the Internet has made it a transformational force that has evolved into a near necessity in our everyday lives.
Now, more than ever, Internet use has become second nature. We reach for our smartphones to listen to music, grab our tablets for reading, and turn to our computers for work, play, and staying connected with friends and family across the country. This ever-connectedness has been made possible by the incredible flexibility and universality of the Internet.
There is a reason ITFA has strong bipartisan support in both chambers of Congress: new taxes on Internet access will not only stymie adoption but also affect all current Internet consumers. The potential for new taxes would apply not just to home Internet access, but to broadband connections on our smartphones and tablets. This, companies say, could add up to an additional $15 to $20 per month, or $200 a year, to Americans’ bills.
Current Internet subscribers would not be the only ones affected if ITFA expires. Internet access taxes also might marginalize future users of the Internet. Internet adoption will suffer if significant new price hurdles are enacted in the form of new taxes, making it more difficult financially for consumers to access the information, opportunities, and other welfare-enhancing benefits of the Web. It is vital we permanently extend ITFA in order to protect the interests of current and future Internet users.
In the face of almost universal consensus that ITFA’s protections against discriminatory taxes should be renewed, it seems like a foregone conclusion that Congress would pass an extension, but the Senate has struggled to do so. Ultimately, failing to extend ITFA could have a negative effect not just on consumers but on small businesses and entrepreneurs as well.
Consumers and businesses are aligned on the need to permanently extend ITFA. With strong bipartisan support and the ability to make a tangible, positive impact on constituents’ lives, passing a permanent extension of ITFA should be front and center on every legislator’s agenda when lawmakers return to work in September. We need a permanent extension to resolve this issue once and for all.
The House of Representatives has already taken a nod from their constituents and acted to extend ITFA’s moratorium against new taxes. Now, it is time for the Senate to pass this necessary legislation before American consumers and businesses face new Internet and broadband taxes that could stifle freedom of expression, access to opportunities, innovation and, ultimately, the economy.