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California Takes A Last Swing At VoIP 182

JamesB writes "News.com's Ben Charny reports that two California cities want to tax Internet telephony. This news comes on the eve of the FCC ruling on whether federal regulations will preempt local ones."
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California Takes A Last Swing At VoIP

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  • Good luck, Arnold! (Score:5, Insightful)

    by Anonymous Cowdog ( 154277 ) on Monday November 08, 2004 @10:48PM (#10762369) Journal
    I buy my Skype credits from a site in Europe. Not sure how they are going to be convinced to share my private personal data with the State of California.

    Besides, the minutes are so cheap, the government tax seekers may be in for a rude awakening when it dawns on them that even a tax as high as ten percent of one penny is still less than one penny.

    It may have been a good idea if VOIP minutely rates compared to real phone rates. But the days of $80 phone calls are gone.

  • by Anonymous Coward on Monday November 08, 2004 @10:51PM (#10762392)
    "News.com's Ben Charny reports that two California cities want to tax Internet telephony. This news comes on the eve of the FCC ruling on whether federal regulations will preempt local ones."

    Let's cut to the chase. What will we get out of being taxed? Will the service be more reliable? Will I get service guarentees? Will my bill be even lower? What's in it for me, if you start taxing Internet Telephony?
  • not surprising (Score:4, Insightful)

    by LupusUF ( 512364 ) on Monday November 08, 2004 @10:56PM (#10762422)
    It is not surprising that they are pushing for more taxes, though my guess is if they brought this to the courts it would be a tough sell.

    Right now people get twitchy about taxing internet technology for fear that they will look 'anti progress.' What we need is for the VOIP companies to fight the cities, and see where things go from there.

    Of course, being in california will make things tough for those trying to fight the tax.
  • by RLiegh ( 247921 ) * on Monday November 08, 2004 @10:57PM (#10762425) Homepage Journal
    What's in it for me, if you start taxing Internet Telephony?
    You'll be allowed to continue using it.
  • by mc6809e ( 214243 ) on Monday November 08, 2004 @10:58PM (#10762439)
    NOT.

    What justifies this sort of taxation?

    Taxes are fine win me, as long as it's to pay for legitimate services. But I have a hard time seeing what additional government serives VoIP users need to pay for.

    I think this is just a case of government seeing another opportunity to use people.

  • I voted against... (Score:4, Insightful)

    by Anonymous Coward on Monday November 08, 2004 @11:00PM (#10762454)
    I voted against the recent CA proposition to tack a telephone surcharge on to pay for a health program. I'm obviously not against health programs, or even against taxes generally (within reason, of course). But slapping a million small taxes on each service (with a million pieces of paperwork to keep track of it all) is hopelessly inefficient and borderline dishonest. Hey gov't: if you're going to spend, then tax and admit to taxing. Stop trying to be sneaky about it.
  • by Lehk228 ( 705449 ) on Monday November 08, 2004 @11:01PM (#10762459) Journal
    nah they will just add a flat tax of $0.15/minute
  • by Anonymous Coward on Monday November 08, 2004 @11:08PM (#10762510)
    Nothing govt. wants to put their grubby paws in there .. even if the govt. isn't adding value to it .. they still want a cut .. that's called robbery in my book. At least with regular taxes you're being given shoved some sort of service (highways, police etc). But by taxing Voip or internet .. the city govt. is basically making money off something they had no part in providing and if somehow they did (DARPA contributions? LOL) then they still have the prob of not announcing it beforehand when they were funding the net that it would be taxed.

    This is robbery and price gouging. The govt. runs the police and can extract whatever money from you for whatever false excuse they feel like providing.

    The politicians are fighting to self preserve and fatten themselves while causing all kinds of hell in the process.

    Is that what the world is coming to?
  • by treke ( 62626 ) on Monday November 08, 2004 @11:11PM (#10762529)

    Well in theory almost all power lies with the state. The Federal government is mostly limited to foreign policy, maintaining the defense of the nation, and regulating interactions between the different states. Of course that's just the theory that was layed out in the Constitution. The federal government has slowly expanded it's powers into other areas, which at one point ended up in a civil war as a number of states tries leaving the union. The 10th ammendment pretty clearly sums up the intentions pretty well:



    The powers not delegated to the United States by the Constitution, nor

    prohibited by it to the States, are reserved to the States respectively,
    or to the people


    So if it seems redundant to you that the federal government and the state governments seem to do the exact same things now, you're in good company.

  • Get a clue (Score:5, Insightful)

    by comwiz56 ( 447651 ) <<comwiz> <at> <gmail.com>> on Monday November 08, 2004 @11:12PM (#10762536) Homepage
    VoIP is not going to be easy to regulate. This makes only slightly more sense then regulating something like... say, IRC. The only reason government has a need to intervene with VoIP in any way is to provide 911 services and possibly wiretapping.
  • Re:OutSource it... (Score:1, Insightful)

    by Anonymous Coward on Monday November 08, 2004 @11:19PM (#10762579)
    Boycott doing business with companies located in Burbank or El Monte .. seriously ..write the damn mayors and tell them that businesses will move out of their towns if they implement this which I'mm sure mthe mayors couldnt care less about .. but then remind them that they lose their chance of re-election if the economy sucks and people have to pay TAX FOR A INTERNET PROTOCOL?!

    These mayors couldnt make ends meet and now want to grab all the pennies from anywhere they can to save their sorry selves.
  • by Jeff DeMaagd ( 2015 ) on Monday November 08, 2004 @11:22PM (#10762592) Homepage Journal
    How is fire funded in your area?

    In my area, it is paid out of property taxes, and that makes a good amount of sense. The more your property is worth, the more it is worth protecting it. Funding fire protection from sales tax, phone tax or internet taxes don't seemm quite fair.
  • by Forbman ( 794277 ) on Monday November 08, 2004 @11:44PM (#10762734)
    It was in the Oregonian today.

    The idea is to cut the standard B&O tax a couple of tenths of a percentage, and add a tax on telecommunications, including pagers, cell phones and landlines. They want to get it to include VoIP as well.

    Of course, what this will do is make the companies a little mad, because they have to keep track of it and collect the $$$ on behalf of the government taxing body, but the telcos will of course pass those costs onto the consumer...

    Oh well. It's not like there are already various state and county taxes on the phone lines, cell phone towers, etc.

  • by ispland ( 460855 ) on Monday November 08, 2004 @11:45PM (#10762744) Homepage
    This entire issue is very much about reduced gov't and reduced taxation vs. increased gov't and more taxes.

    State and local policiticans see VoIP is an easy mark for more tax revenue. But it's only taxable if they can control the entire telephone and long distance business thru state level regulation. So don't underestimate the determination here, both of these issues greatly increase the power of local politicians.

    Since VoIP is only used by businesses and a few not-too-vocal consumers, it's an popular and easy mark to tax right now. And the common man sees lots of taxes on his home phone bills, so it's only fair that everyone else pay taxes on their phone calls, right?

    The monopoly ILEC's see taxation as a matter of reducing competitors' advantage and controlling the growth of VoIP for smaller customers.

    They are late to the party on VoIP and want to use taxes as a means of reducing competition for their POTS based services. It's also seen as a way of narrowing the playing field. More taxes means more regulation, more lawyers, and more barriers to competition.

  • by Elizabeth007 ( 829402 ) <ekpardo@g m a i l . c om> on Monday November 08, 2004 @11:51PM (#10762785) Journal
    I'm not that naive. ;-)

    However, if you get together with a lot of people and raise a stink, you get your way.

    Case in point: look at the uproar surrounding Janet Jackson at the superbowl. Everyone got fined because some people got up off their over-reactive arses and wrote a couple of letters to the FCC. Now, I'm guessing a lot of Americans could have cared less and didn't even see "the flash." In fact, I read something like 100,000 people wrote (and that is a very small minority compared to the population of this country). Still, they got their way.....

  • by lightknight ( 213164 ) on Tuesday November 09, 2004 @12:25AM (#10762957) Homepage
    Kill the politicians.

    As time goes by, and as taxes increase (or new ones created), we are going to reach (or have reached) a point where taxes are no longer justified, where it costs less to hire a security firm to enforce laws, pay for healthcare out of your own pocket (cash), and send your kids to private school than it does to continue supporting the leviathon.

    The US government was created to enforce negative rights (no murdering or stealing, essentially), not positive rights (take a little from these guys, give it to those guys, tell them it's for the public good).

    And yet people say "But look at what you get for free*". Right, look a little closer. True, the service is free, and you are guaranteed service. But look a little closer: look at the kind of service you are guaranteed. If anyone ran a business this badly, they'd be run out of town!

    We have half the US going all out for Canadian healthcare (it's free, universal, good*), and the other half wants nothing to do with it. Why? Because of what you get. If you have money (over a few thousand in the bank, which almost everyone can achieve), you can walk into any hospital and they will (figuratively) roll out the red carpet. You need a major surgery? You want the best people working on you? You got it. Pick and choose, ala carte. You don't like the snooty nurses or do not have confidence in your doctor? Go see another one. Under Canadian healthcare, money doesn't matter. You are placed in a queue. Works for some things, doesn't work for most things. And you have no say in your treatments. Kind of like HMOs, but it's the government, so you know they won't put lube on before they fuck you up the ass (decide it's too costly to keep you alive). But everyone is treated equally (unless you know someone on the board of directors), so everything is good*.

    A man cannot serve two masters, so in this case: A doctor cannot serve you and the government (or an insurance company). He serves the man who pays the bills.

    For whatever charges I may incur, I prefer being the master of my own healthcare. If I have cancer, I'll pay top dollar to rip the sucker out of me. If I do not have the money, I'll take out a loan, ask some friends, whatever it takes. But I will be the one who decides whether I should go with "less costly" treatments, whether I should be "made comfortable". I am not another worker of the State, I am not here to serve "the greater good", and not giving up my freedom or control over my life to a bunch of pompous assholes who sit on a committee, in the Senate, a thousand miles away, making life and death decisions for people whom they will never meet.

  • by aussie_a ( 778472 ) on Tuesday November 09, 2004 @12:35AM (#10763023) Journal
    So this tax will make it illegal to send voice transmissions over the web unless you pay the tax? I guess all those online games that allow voice-chat better get ready to pay this tax then.
  • by enosys ( 705759 ) on Tuesday November 09, 2004 @12:41AM (#10763052) Homepage
    You probably want a local phone number. Do you want to tell people to call some number in India to reach you?
  • Re:OutSource it... (Score:4, Insightful)

    by starm_ ( 573321 ) on Tuesday November 09, 2004 @01:03AM (#10763167)
    insert statement about economical benefits of outsourcing in the long run.
  • by xgamer04 ( 248962 ) <xgamer04NO@SPAMyahoo.com> on Tuesday November 09, 2004 @01:06AM (#10763181)
    One thing that's often overlooked when the "all taxes are bad" arguments surface is this: governments provide a (sort of) stable infrastructure within which to do business. Your tax dollars give you the following:

    -a currency that (hopefully) won't fluctuate wildly
    -a justice system that deters and attempts to correct bad business practices.
    -physical infrastructure (roads, etc)

    there are of course others, but the main point I'm trying to make is that governments provide a little more than we give them credit for. THIS IS NOT AN ARGUMENT ON WHAT THE SIZE OR SCOPE OF GOVERNMENT IS. I DO NOT ENDORSE EITHER SIDE OF THIS ISSUE. I'M XGAMER04 AND I APPROVE THIS MESSAGE.
  • by potus98 ( 741836 ) on Tuesday November 09, 2004 @01:14AM (#10763236) Journal

    From an earlier post: "I think this is just a case of government seeing another opportunity to use people."

    Correction: You should think this is just a case of your neighbor seeing another opportunity to take away your money. Assuming we're talking about the US, "we the people" empower the government to use guns to take away resources from other people. NEVER lose site of this. It's the same notion as guns don't kill people, people kill people. Governments don't, on their own, take money from people. People USE the government to take money from people.

    From another earlier post: "voip tax on businesses can be a way to focus taxation on companies that won't go broke even if taxed"

    A similar notion applies here. COMPANIES DON'T PAY TAXES! Companies merely collect taxes from people and forward the money to the government. NEVER lose site of this either.

    Argue these points as much as you like. Left-wing spin or right-wing spin doesn't matter. The basic fact is that people create and empower government to use the threat of deadly force to take away your property and give it to someone else. To some extent, this is usually considered okay. The other basic fact is for EVERY tax that a company pays, somewhere, somehow, their customer (which is eventually a person) pays for the tax. It may be a long path in some instances, but in the end, a PERSON pays for every tax levied on any corporation.

  • by billstewart ( 78916 ) on Tuesday November 09, 2004 @02:10AM (#10763522) Journal
    VOIP is clearly interstate commerce, even if you're using a phone company that has local presence in your state. Therefore, the US Constitution's Commerce Clause makes it Federal jurisdiction, just as shipping between states by boat is interstate commerce even if you're using a dock in some state that would like to tax you. It's not like the access line to your house, which the state's already taxing (even that could be argued to be interstate commerce, but there's a lot of historical precedent.)

    VOIP technology is taking the cost of long-distance calling to zero; the main reason companies like Vonage can get away with charging as much as they do is that they're providing convenience to early adopters, and big long distance spenders use a lot of minutes of last-mile delivery (currently billed about 2 cents per minute in much of the US.)

    Towns like getting money, and once they get a source of it they make sure to spend it irresponsibly, and California's current state budget problems mean that the state is keeping more money that was previously going to the cities, so they're looking around harder for any sources of catch and grouchier about anything they lose. But this source of money is toast.

  • by billstewart ( 78916 ) on Tuesday November 09, 2004 @05:21AM (#10764151) Journal
    I'm shocked, shocked to hear allegations of pork-barrel spending by our fine Legislature!

    But no, the problems aren't caused by the legislature's spending money on pork-barrel. They're caused by the legislature and executive branch being unwilling to make honest and realistic predictions of income, expenses, and risk, and being unwilling to come up with the political guts to either raise taxes enough to cover their current expenses plus past debts or else to cut spending, and reality's making it harder to just lie about the numbers, which was the traditional way to resolve those conflicts.

    Before the state adopted Term Limits, legislators might expect that if they did a good job they'd be in office long enough to get hit with the consequences of their mistakes, and that if they did a politically unpopular job, they'd get thrown out of office, so they had some incentive to do the right thing. Now that they're only going to have their seats for two terms maximum, they've got an incentive to make bogus forecasts of future income (like predicting that the dot-com boom would go on forever), borrow heavily against it, enact popular spending programs, and leave their successors in office stuck with cleaning up the mess.

  • by gstoddart ( 321705 ) on Tuesday November 09, 2004 @11:53AM (#10766275) Homepage
    VOIP is clearly interstate commerce, even if you're using a phone company that has local presence in your state.


    Is it really? I think of it as more bandwidth which may or may not be used for VoIP.

    If I can run an FTP session between two machines without it being the business of the government what I do, I fail to see why VoIP is different. You are already paying for the bandwidth from the provider, and the way you use it is just doling it out.

    Are they going to start requiring all businesses to keep detailed, per-task bandwidth logs so that all of the different activities can be individually taxed?? Someone will decide that IM programs need to be individually taxed, and the costs associated with that will need to be tracked and taxed? Web server traffic could be argued to be more geared towards interstate commerce.

    What about VPN traffic. It's sent encrypted, and (in theory) isn't anyone else's damned business. If you use an application which uses chat/voice over the VPN, does that need to get individually taxed?

    Someone could do something silly like saying "any VoIP routed through this state" like they do with spam laws. I guess the problem I have with that is that I have no way of knowing where my packets get routed, and I sure as hell don't want any place with a hub having legal jurisdiction. Heck, the jurisdictions could change within a single session. [ I don't buy this argument for spam laws either really ]

    I just have a real hard time accepting that this use of bandwidth is any different from all of the other uses of bandwidth, and why they get to tax it. They're probably taxing you on the bandwidth already.

    Cheers

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