The House of Representatives had one answer Tuesday for a United Nations report recommending a "bit tax" on American e-mail to finance underdeveloped countries' telecommunications operations - don't even think about it.
The House vote condemning worldwide internet tariffs was a whopping 423-1. "Information should not be taxed," says California Republican Congressman Christopher Cox to Conservative News Service. Cox and Oregon Democratic Senator Ron Wyden co-sponsored the Global Internet Tax Freedom Act, which is expected to pass big in the Senate as well. And President Clinton also supports the measure.
As well he might. In addition to tweaking the U.N. for the bit tax proposal - which increases based on the size of the file being transferred - the bill calls on the president to ask the World Trade Organization to pass a permanent moratorium on e-commerce tariffs. The United States got a one-year moratorium on them last year.
In July, the U.N.'s Human Development Report cited a gap between computer users in more developed nations and less advanced nations "which market forces alone will not rectify." The report called for a tax of one American cent on every 100 lengthy e-mails, hoping to generate over $70 billion in revenue annually. But analysts tell CNS that of the three main factors in such disparities - education, age, and income - income was the least influential of them.
"The private sector, without any subsidies, has cut the cost of a computer - for practical purposes - today, to zero," Jeffrey Eisenach, president of the Progress and Freedom Foundation, a free-market think tank, tells CNS. "How much cheaper than free does it have to be before we start saying we have to start subsiding it for the poor?" He says the way to make the Internet less expensive is to cut telecommunications costs by cutting and not raising taxes, adding that most countries still have not de-regulated their telecommunications industries.
