California & Unions Plotting to Tax iTunes, Emails, and World of Warcraft.
This is a growing national trend.
By Erick Posted in 2008 | California | taxes | utilities — Comments (6) / Email this page » / Leave a comment »
Most of you will not know what I'm talking about. You better get very familiar with it very fast.
Out in California, a new trend is starting that we can expect to sweep across the country pretty quickly. And it's a tax scheme disguised as a modernization scheme.
All of us with phones and cable television pay a telecommunications tax in the form a utility tax that local communities use to maintain telecom infrastructure. In California, several municipalities, in cooperation with unions, are working to modernize the tax.
They are claiming they will lower the tax rate on the utility tax, but the catch is that they are expanding what is taxed under the tax. The old tax just covered phone and cable. The "tax modernization" would cover cell phones, and any transmission "of voice, data, audio, video, or any other information."
This, in effect, becomes an iTunes tax and an email tax. And since municipalities can't impose their sales tax over the internet, they are gung-ho on this tax expansion.
And why are unions backing this? Because while the old tax was used to pay for specific things relating to telecommunications, the new tax will go into the general fund.
Get educated now. This is a growing trend and it'll probably be coming to your city soon.
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California & Unions Plotting to Tax iTunes, Emails, and World of Warcraft. 6 Comments (0 topical, 6 editorial, 0 hidden) Post a comment »
Yes and no. Governments use the tax to pay for infrastructure to areas that otherwise would not get it, maintain parts of the telecom infrastructure for police and fire radio traffic, etc.
But how will they know the value of my lvl 75 Paladin with disinigration helm?
I'm assuming it's an initiative because new taxes basically can't get through the Legislative Republicans.
I think it'd be interesting because we could see a north/south split, where the Bay area lefties squawk while the LA area lefties back it.
If so, these don't require state legislative approval nor an initiative. Many communities in California already have these on the books; it will just require the local city councils to pass these new taxes - and only a local initiative could overturn them, which is not easy to do.
As for court challenges, I don't know if they'd have any chance. Nor do I know if the enabling legislation for these utility taxes restricts the usages of these revenues.
Of course we ARE talking about California so I'm not surprised. But aren't the telecom, wireless, and internet infrastructures maintained by the private companies that own them?
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