Why Europe Won't Be Taxing Your Emails And SMS Messages

from the blown-out-of-proportion dept

Tue, May 30th 2006 1:08am — Mike Masnick

A bunch of folks submitted the following Reuters story over the weekend, fretting about a "proposal" in Europe to tax emails and SMS messages. This is the type of story that seems to get people really worked up -- as it has for years every time an urban legend or rumor pops up about taxing emails. However, the details on this one suggest there's little to nothing to be worried about. Beyond the ridiculous difficulty (read: near impossibility) of actually implementing such a tax, the simple fact that just about everyone would rebel against it pretty much kills any possibility of it ever happening. If anyone actually did try to implement it, it would be routed around so quickly that there would be very little (if any) revenue generated for any government. In the meantime, it sounds like the idea was just thrown out as an idea -- rather than any serious proposal that anyone expects to go anywhere. It certainly looks like email and SMS messaging will remain tax free for the foreseeable future.

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Russ McGuire, 30 May 2006 @ 1:04am

No longer an urban legend
Obviously, the logic in this article is flawless. This is a foolish proposal that will fail for many reasons (see http://law-of-mobility.com/2006/05/30/no-longer-an-urban-legend-frenchman-proposes-eu-tax-on-e-mail- and-sms/ for my extended thoughts). However, I believe this proposal is an important step forward towards taxing e-mail (and SMS). The traditional urban legend was based on an e-mail circulating that claimed that some fictional lawmaker (in Canada or the US or Australia or Britain) had proposed some form of tax on e-mail and that some fictional group was fighting it. Those that track and debunk these urban legends used much of the same logic as Mr. Masnick makes in this article to point out why it's ludicrous that any lawmaker would actually propose such a thing. However, now a lawmaker actually has proposed it. Sadly, in cases like this, it's not far from being ludicrous that anyone would propose it to being ludicrous that it would actually be made into law to being ludicrous that anyone would actually pay it, etc. I doubt this particular proposal will become law, but it sets the precedent that I'm sure other lawmakers will follow as they continue to see telecom and related services as an easy place to build government revenues through over-taxation. (As always, my comments are my own and do not necessarily reflect the positions, strategies, or opinions of my employer.)
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kingmanor, 30 May 2006 @ 1:22am

Why impossible?
OK I understand this is HIGHLY unlikely to ever happen, but would you care to explain why its near impossible? If the carriers can bill you PER SMS MESSAGE, then why wouldn't they be able to tax you per sms message as well? What exactly do you mean it will be routed around? I see no difference in the route a message takes, if the carrier on each end can bill the message, they can tax it.
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- kilroy, 30 May 2006 @ 7:41am
  
  Re: Why impossible?
  I'd have to agree here - It is hardly impossible. The other point is that you say "everyone would rebel", but that too is unrealistic. Here in Canada, we roll over and accept some pretty intense taxation. Whenever a government thinks that further taxation might meet with resistance they simply impliment it as a "user-fee". Those who desire or require the service will pay for it, witht he exception of those who choose to break the law.
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Ponder, 30 May 2006 @ 1:46am

Well, in the UK.....
we are taxed on text messaging. All paid for service have VAT on them. They already tax them via either our top-ups or our bills etc. In reply to the first post, taxing text messages is not just possible its being done effectively. The point being made in the article applies to emails-how do you bill everyone for how many emails they send. Most will have multiple email accounts. Some will be on UK sites, some will be American sites, others will be from other places. To make it more intresting, some will be created with online screen names and no location details. How do you match each email address to a person? How do you know which ones will be people in your country? Answer: You can't (unless like china you ban private email servers and firewall your country off, and stop people getting free email addresses from other country, and any EU country would get stopped). Even if you could people would get round it and demostrate against it.
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Griff (profile), 30 May 2006 @ 3:48am

Taxing SMS messages
I'm more bothered by the extortionate price of SMS than any extra tax on them. Where's the free market when you need it ?

Cartel if you ask me.

£0.10 for 200 bytes sent with no particular urgency in the spare network bandwidth ?
They're having a larf !
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- Iron Chef, 30 May 2006 @ 1:38pm
  
  Re: Taxing SMS messages
  I'm more bothered by the extortionate price of SMS than any extra tax on them. Where's the free market when you need it ? Cartel if you ask me.
  
  £0.10 for 200 bytes sent with no particular urgency in the spare network bandwidth ?
  
  I've often wondered about this too. SMS was an 'accident', an feature included in the GSM BCCH spec that was discovered and exploited by accident. It's truly the most expensive way to communicate- costing nearly $4,000 per megabyte.
  
  £0.10 per SMS? Holy shit. I can't believe it's that expensive... Stateside, With T-Mobile, one could have 400 Text or SMS for $4.99 I thought Verizon was expensive: 200 SMS (only) for $5...
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Antoine Clarke, 30 May 2006 @ 5:19am

VAT
Not only are SMS messages already taxed, in that there is VAT included in mobile phone bills, but ISP charges also attract VAT, and fixed telephone charges too. It's worth pondering how much the European economy would be boosted if, instead of taxing emails, the existing taxes on communications were scrapped. The administration savings for the companies concerned in collecting the VAT would be worth bearing in mind, as well as the lowering of barriers to entry (VAT paperwork is one of the biggest obstacles to entrepreneurship in the EU).
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Jamie, 30 May 2006 @ 6:18am

Why shouldn't we worry?
Yes I know that it would be very difficult for a government to implement an email tax. That doesn't make it impossible. The government simply outlaws unlicensed email servers. China has already done this (though for a different reason) and for the most part it works. Sure there are ways around it, but the truth is that once those ways are illegal, most people will not use them.
My problem here is that the "email tax" idea keeps coming up in government circles (both in the EU and the US). Enough politicians seem to think it is a good enough idea that the idea won't die. The idea doesn't have to be a good or even feasible idea for it to become law. We already have too many laws on the books that were bad ideas right from the start. So as long as the "email tax" idea keeps getting tossed out as a possible plan by politicians I will be worried.
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Tim Arview, 30 May 2006 @ 8:12am

Ch-ch-ch-changes
Sadly, the world around us is changing every day. Gone are the days of calling anything impossible. In fact, let me share a story with you.

Several years back, I worked tech support at an ISP. As you might imagine, we got lots of "ridiculous" calls. One woman called us because her cable was out. Now, I see you nodding as if this may be a common call, right? The problem was, this was before cable Internet. She called about her cable TELEVISION. But you see the point? Things change.

At the same ISP, I once got a call from a woman who was afraid hackers were going to get into her computer, even with the telephone line unplugged (i.e. through the power cable). I assured her there was no way for hackers to break into her computer through the power cable. But lately I've heard a rumor about Internet access through power lines. That would make her "silly" fear a very reasonable one.

While I agree that an e-mail tax is very unlikely, it is not - as has been said - impossible. In fact, one day within the next decade we could be here saying "Gone are the days of free e-mail." The upside is, spam will also be extremely cut. Particularly the illegitimate spam that comes from spoof e-mail address (since all SMTP servers would need to require a login).

Now if you think that people won't pay for it, look at the gas prices. I remember when everyone said, "Gas will never get over $2 a gallon. People just won't pay that for gas." Yeah...right.

Unfortunately, as a whole, we aren't a very rebellious people. Sure, we complain. Many of us have the option to write our congressman and/or senator - and some of us actually do. But, for the most part, we simply bend over and take it because we don't see an alternative.
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Nobody, 30 May 2006 @ 8:32am

Some context
America's 1898 "luxury" exise tax on long distance phone calls was just overturned last week. A similar tax on local phone service remains in place.
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Anonymous Coward, 30 May 2006 @ 10:10am

"My problem here is that the "email tax" idea keeps coming up in government circles (both in the EU and the US). Enough politicians seem to think it is a good enough idea that the idea won't die."

When has it EVER come up in the US? There is a persistant urban myth about taxing email in the US, complete with a non-existent bill number. Can you provide a link to any actual US proposal?
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- Jamie, 30 May 2006 @ 1:20pm
  
  Re:
  "When has it EVER come up in the US? There is a persistant urban myth about taxing email in the US, complete with a non-existent bill number. "
  
  There is no Bill number, because like the incident reported in the article, it has never gotten that far. There have been several politicians that floated the idea before. (No I don't have any links and I don't have time to hunt them down right now) Most of them floated it as an anti-spam initiative. It has always been nothing more than a suggestion or an idea, that has never reached a true proposal stage. Mainly because it wasn't practical.
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ET, 30 May 2006 @ 10:24am

Remember when...
Remember when bread was only a nickel? Remember when a pack of cigarettes was only a quarter? Remember when text messaging on your phone was free?

Times change, people... and as soon as uncle sam, our or any other government finds the technology to track how many emails you send/receive and how to tax you for it, be prepared to pay for it... sooner or later it WILL happen, whether you like it or not. It's a government thing... they're like leeches... they will find a spot to suck you dry one way or another.
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krum, 30 May 2006 @ 11:06am

sms tax
Alot of States in the U.S. already tax sms. It's no problem for them to put a penny or two on the .10 per message fee. But I have noticed that if you're paying extra for a "messaging package" of some kind, the included messages don't get taxed. I don't know if this is in all States but it is in California. But of course, then you're taxed on the monthly price of that messaging package.
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Thomas Blumer, 30 May 2006 @ 8:01pm

e-mail tax
Big difference: the post office e-mail tax was always a silly Internet rumor.

The Reuters reports notes that the EU has a working group addressing it and quotes a member of Chirac's party enthusiastically talking about how much money it would bring in.

The EU may not be as divorced from reality as you think. Why wouldn't they propose this, wait for it to get hooted down, and then come back with a proposal that exempts the first couple of thousand messages a month? Then it would turn into a "big business tax," and unfortunately people would support it because it "doesn't affect them," not recognizing the long-term implications.

Tom Blumer
BizzyBlog.com
Post:
http://www.bizzyblog.com/?p=2250
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