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January 02, 2005
My Letter to the Wall Street Journal: Published!
WSJ: December 31, 2004: Cities Plot a New Tax Raid Against the Web
"Cities Plot a New Tax Raid Against the Web
Your Dec. 22 editorial "A National Telephone Tax?" shines a spotlight on those politicians and policymakers who have been sending mixed messages to the VoIP industry (the new technology that allows consumers to place calls over the Web). However, you missed the more immediate and more brazen efforts by several municipalities to impose debilitating fees on the nascent VoIP industry.
Just weeks after the FCC concluded that VoIP services must not be subjected to 50 state and countless local rules that would make it impossible for any would-be VoIP provider to deploy a national or global communications product, we have heard rumblings from both state and local authorities who intend to extract as much blood as possible. You properly noted recent efforts by the National Governors Association and by some in Congress who would attempt to impose sin-level taxes of upward of 20% on VoIP services. But there are similar efforts by municipalities such as Santa Monica to impose utility use taxes on VoIP services that might have only the most remote, tangential connection to the city. At least Santa Monica had the nerve to confront the industry directly without trying to hide behind a mob of like-minded municipalities.
Unlike Santa Monica, members of the National Governors Association also have blood in their eyes for VoIP, but are attempting to shield themselves within the mob. Then they won't individually take the heat for being the only tax-imposing luddite driving away the VoIP industry.
If it were only Santa Monica imposing a municipal tax, the VoIP providers could simply take their services elsewhere and the only losers would be the Santa Monica consumers who might not benefit from the promise of IP-based communications. If every state were to join forces and impose a similar tax, so the logic goes, no haven would exist for tax-dodging VoIP providers.
This logic fails to recognize that VoIP is a global phenomenon. The municipalities, states and countries that embrace the new technology and foster the growth of IP communications will become havens for IP entrepreneurs. Those that impose unnecessary burdens on IP will find they have become pariahs to the would-be entrepreneurs. The residents of the backward-looking governments will become disenfranchised wallflowers at the communications revolution.
What seems most disturbing about the governors association push to tax VoIP is that it is spearheaded by Gov. Mark Warner of Virginia. Those of us from high tech/telecom backgrounds recognized Gov. Warner as a former champion of new technology and believed his goal was to create a haven for new technology within Virginia. Surely he knows the fragile nature of burgeoning technology and what it takes to nurture it.
This certainly cannot be the same Mark Warner who wanted to make Virginia a hub of new technology and innovation. That Mark Warner would know better than to send us scrambling for more inviting jurisdictions.
Jeff Pulver
CEO
pulver.com
Melville, N.Y."
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Posted by jeff on January 2, 2005 01:07 AM | Permalink
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