Preston Gralla

Get ready for the broadband tax

January 31, 2007 8:44 PM EST
By next year, you could be paying taxes on your broadband connection, VoIP calls, and even local phone calls. A pair of powerful Congressmen -- one Democrat and one Republican -- are pushing hard for the new taxes. Believe it or not, the taxes are probably a good idea.

Democratic Rep. Rick Boucher of Virginia and Republican Lee Terry of Nebraska are pushing to levy a tax on "all who offer a network connection," and would include a tax on local phone calls as well.

The money would be put into the Universal Service Fund that is currently used to subsidize phone service in rural and low-income areas, and to provide low-cost Internet and phone service for schools and libraries.

The Universal Service Fund is currently funded only by taxes on long-distance phone service. With long-distance revenues dwindling, the fund has been dwindling as well. So these new taxes would be a way to make sure that there was still money in it.

The Congressmen are pushing for one very important change in that fund --- it would also be allowed to be used to subsidize broadband services to rural areas and other areas that lack broadband service. Here's where the real benefits of the tax comes. Rural areas are dying out, and one reason is the lack of broadband services. With broadband subsidies, rural areas could be revitalized. The economic boon would more than pay back the taxes. Everyone benefits.

Like everyone else, I'm not a big fan of paying more taxes. But I'd do it willingly knowing the good it would do.