California Running Out of Money, Now Wants To Tax Text Messages
A proposal filed Sunday to the Public Utilities Commission of California could result in the state’s residents paying a tax on text messaging.
The proposal, which could be heard by Commissioner Carla J. Peterman as early as Thursday, suggests that “text message services revenue should be subject to Public Purpose Program surcharges and user fees.”
The state believes collecting a tax on text messaging is needed to provide the necessary revenue to the Public Purpose Program to maintain basic wireless services for low-income residents.
Most people do it: Pick up their phones and, instead of calling someone, send a quick text message. Well, that text message could cost an extra tax if California state regulators get their way. https://t.co/uTEl71QVJT
— NBC Bay Area (@nbcbayarea) December 12, 2018
In other words, the tax is designed to help support low-cost cell service for those in lower income brackets.
“It’s a dumb idea,” said Jim Wunderman, president of the Bay Area Council business-sponsored advocacy group, told the San Jose Mercury News. “This is how conversations take place in this day and age, and it’s almost like saying there should be a tax on the conversations we have.”
The Bay Area Council, California Chamber of Commerce and Silicon Valley Leadership Group estimate the new charges would generate about $44.5 million per year.
According to the California Public Utilities Commission report, the Public Purpose Program budget has climbed from $670 million in 2011 to $998 million last year. But telecommunications revenues that fund the program have decreased from $16.5 billion in 2011 to $11.3 billion in 2017.
“This is unsustainable over time,” the report says, adding that the texting surcharges could help low-income Californians afford phone service.
But critics of the surcharge claim it’s the low-income users — the people the surcharge supposedly is designed the benefit — who will be most impacted by the proposal, since they may reduce their text messaging because of the fees.
In addition, Wunderman believes the money needed to fund the Public Purpose Program is already available.
“California’s state government is currently flush with a projected budget surplus of nearly $15 billion next year,” Wunderman wrote in an Op-Ed in the Mercury News.
“While perhaps well-intentioned, the specific programs that the commissioners are hoping to fund with your tax dollars already has around $1 billion to spend,” he added. “These programs are not in need of greater funding from texting or any other source, and even if they were, there is already an approved, transparent process at the commission to raise the necessary funds without the need to create new taxes.”
The logistics of just how such a so-called text tax would be implemented have not been spelled out, but it’s unlikely to be a fee for each text, but rather yet another surcharge added to a customer’s wireless bill.
Whether or not the text surcharge can be implemented will hinge on if the FCC rules the Public Utilities Commission has the authority to implement and collect the surcharges.
A wireless trade group claims texting is similar to email — purely a messaging tool, and not a telephone service — and isn’t subject to a tax by the commission.
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