by George S. Ford
Phoenix Center
June 13, 2014
In November 2014, the Internet Tax Freedom Act (ITFA) is set to expire. If Congress fails to renew the ITFA, then a longstanding moratorium on new state and local taxes on Internet access will end. Such taxes would have a sizeable adverse effect on broadband adoption, likely erasing all reasonable estimates of the gains to Internet adoption from the billions of dollars spent to date on federal, state and private-sector programs. It is axiomatic that taxes reduce consumption, and it is for that reason that various governments at various levels levy taxes on cigarettes, alcohol and gasoline. Yet for twenty years, it has been a key policy goal of the United States government to increase broadband adoption. Given that billions of dollars have been spent to achieve this goal, choosing to reduce broadband consumption by allowing the ITFA would be an odd and counterproductive policy.

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