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Is Your Internet Bill About to Go Up?

When you look at your mobile and home internet bills, have you ever noticed the taxes and fees section?

Well if some in Congress get their way, these taxes could be even higher — with many of us paying an extra $20 per month for online access
(18% tax rate on home internet and mobile bills totaling $110 per month).

In 1998, Congressional Republicans and Democrats came together to limit the digital divide and foster internet growth and adoption. They passed the Internet Tax Freedom Act (ITFA) which prevents local taxes on internet access.

Since then our use of and reliance on the internet has grown — the UN even called internet access a human right.

Internet access is a critical tool for job seekers, students, businesses, and healthcare providers. You would think that the last thing we want is action that would make it more expensive for people to get online.

New Taxes for Those Who Can Least Afford Them

And while to some, an extra $20 a month isn’t much, to many families across the country that is enough to cause them to cut the internet cable.

While there is near total internet adoption among families making more than $50,000, for those under $25,000, adoption falls to 48%.

How much greater would this income inequality become if ITFA were to lapse?

How many online devices would you disconnect if it meant you could save $240 a year?


Playing Politics with Internet Access

Unfortunately, Washington politics are preventing these efforts to keep online access affordable.

Because there is strong bi-partisan support, some in Congress are leveraging ITFA for their own uses. They are holding ITFA hostage so they can use it as a bargaining chip to advance their own legislative agendas.

The leader of this anti-internet effort is Senator Dick Durbin (D-IL).

Just last month Sen. Durbin and his partners tried to block ITFA renewal so they could pass their own bill — a bill to give states auditors more authority to tax out-of-state merchants.

The last thing we should be doing is playing politics with ITFA.

More than 87% of the U.S. population use the internet. And that affordability of internet services is a core reason for this adoption.

Allowing ITFA to lapse, and failing to pass a permanent ITFA will increase the income inequality between low and high-income individuals and depress intra-American communication and innovation.