Fred LaSor: Ready for another tax?
December 31, 2018
A news item in the Wall Street Journal recently reported there are plans afoot in Sacramento to tax text messaging. The California Public Utilities Commission wants this, according to the news story, to raise money "to pay for cellphone service to poor people." That sounds plausible, if socially pointless. Interestingly enough, the CPUC wants this tax because their tax on cellphone use is no longer generating as much income now because people text more than calling. The PUC believes a texting tax would generate $44 million, and get this: they propose to make it retroactive five years, a new wrinkle in taxation that other tax authorities will surely be watching closely.
Readers might be surprised by my next statement, but I for one have been thinking for nearly a year now that the time has come to impose a small tax or service fee on emails, cellphone calls and texts.
"Heck no!" you say? Let me explain.
Taxes serve two purposes. One, obviously, is to generate revenue for the taxing authority. Your sales tax pays for local government operations in the city or county where you live, and without that money you would have no police or firemen. But taxes also influence the way you spend money, which explains why you see so many cars with California license plates filling their tanks in Nevada, where gas tax is significantly lower. Essentially, California drivers are driving extra miles to save a few dollars on gas.
So imagine the impact on advertisers if, all of a sudden, they had to start paying a few cents for every email, text or cellphone call they made. I don’t know how much it would have to be to slow the mass mailings, but for someone sending out 100,000 emails a day, only a few cents additional cost for each would probably influence their decision to send to a more narrowly targeted list instead of the large list they now use.
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So what does this have to do with taxing texts?
Lots of readers, I suspect, have noticed that junk emails, anonymous cell calls and texts from people you don't know have increased significantly in the past few years. I get texts and emails on a daily basis offering me supplemental health insurance, lowering of credit card interest rates, or other goods and services not targeted to my interests. This is the equivalent of those post cards and letters that used to appear in your mail box on a daily basis addressed to "Occupant." Except that emails and texts are a lot cheaper to the sender than the paper mail that came through U.S. Postal Service, because an advertiser can buy a mass email address list for a few dollars and shoot out thousands of emails or texts for almost nothing.
So imagine the impact on advertisers if, all of a sudden, they had to start paying a few cents for every email, text or cellphone call they made. I don't know how much it would have to be to slow the mass mailings, but for someone sending out a hundred thousand emails a day, only a few cents additional cost for each would probably influence their decision to send to a more narrowly targeted list instead of the very large list they now use. If they had to pay 3 cents for each addressee, perhaps advertisers would stop offering to pay off my student debt. As readers might guess, I have not had student debt in dozens of years, but that matters little to an advertiser who pays nothing to send me an email.
What would this do to the average emailer or texter? It might mean that silly joke or cartoon you sent out to 20 people yesterday would only go to five people, and maybe the photos of the grandkids would not get to Aunt Millie. But that's a small price to pay for fewer junk emails or texts. And if we could make the tax applicable worldwide, you would not be hearing from as many Nigerian princes who want to share their wealth with you. This is one tax I might support.