With the Federal Communications Commission set to vote on strong net neutrality rules this Thursday, the opposition is getting increasingly shrill, and their favorite talking point—a false one—is that it’s going to raise your taxes.
“Stop the federal internet takeover!” That’s the warning that Sen. Mike Lee blasted out to readers of conservative email lists last month. “This is essentially a massive tax increase on the middle class, being passed in the dead of night without the American public really being made aware of what is going on,” wrote the Utah Republican. “New taxes and fees” could total “$15 billion annually,” Grover Norquist, the head of Americans for Tax Reform, claimed in an op-ed. It’s “Obamacare for the internet,” Sen. Ted Cruz (R-Texas) hollered.
That false talking point comes from a discredited analysis of the issue by a group called the Progressive Policy Institute that claims that the option the FCC plans to take on net neutrality, reclassifying it under Title II of the Telecommunications Act, could cost American consumers up to $15 billion annually. The claim has been debunked by internet advocates andtraditional media fact-checkers alike, as relying on “fuzzy math” and “significant factual error[s].”
But it still gets traction, including at The New York Times, as Media Matters points out. TheTimes “Bits” blog, which really should know better, repeated the debunked claim in a post last week, even while it included a statement from FCC spokesperson Kim Hart that Wheeler’s plan “‘does not raise taxes or fees. Period.'”
The reality is that the FCC can and probably will “declare that broadband is a purely interstate telecom service,” as Free Press explains. “Because broadband access is interstate and not intrastate, none of the intrastate taxes or special telecom fees would apply.” States could impose a sales tax on interstate telecom services, but that’s just about the only tax that could apply here, and it would be a maximum of about $4 billion, nationally, as opposed to $15 billion. But the FCC and Congress could both take action to eliminate any extra taxes. (more…)