[Politech] Congress says new tax on all Internet connections is an "option"

From: Declan McCullagh (declan@private)
Date: Fri Jan 28 2005 - 15:26:10 PST


Congress proposes tax on all data
Published: January 28, 2005, 3:50 PM PST
By Declan McCullagh

An influential congressional committee has dropped a political
bombshell by suggesting that a tax originally created to pay for the
Spanish American War could be extended to all Internet and data
connections this year.

The committee, which is deeply involved with writing U.S. tax laws,
unexpectedly said in a report on Thursday that the 3 percent
telecommunications tax could be revised to cover "all data
communications services to end users," including broadband, dial-up,
fiber, cable modems, cellular and DSL (digital subscriber line) links.

Currently the 3 percent excise tax applies only to traditional
telephone service. But because of technological convergence and the
dropping popularity of landlines, the Joint Committee on Taxation
concluded in its review of tax law reforms, it may make sense to
extend the 100-year old levy to new technologies. The committee did
not take a position on whether Congress should approve such an
extension and simply listed it as an "option."

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