Anti-Tax Group Calls For Moratorium On VoIP Regulation

In an open letter to FCC Chairman Michael Powell, the National Taxpayers Union is asking for "an explicit policy of forbearance of taxation and regulation on Internet telephony," to better

April 7, 2004

2 Min Read
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In an open letter to FCC Chairman Michael Powell, the National Taxpayers Union is asking for "an explicit policy of forbearance of taxation and regulation on Internet telephony," to better ensure that the growth of the nascent technology isn't hampered by taxes or regulations.

"We think it's important to weigh in [on this topic] early on," said John Berthoud, president of the NTU, an organization whose goal is to seek tax reform on a wide range of issues. The letter is signed by representatives from 32 other like organizations, including the Howard Jarvis Taxpayers Association, Americans for Tax Reform and the New York Tax Reform Organization.

In a conference call Wednesday, Berthoud said the group's goal was not to dictate to the FCC how it should solve thorny issues like intercarrier compensation or the Universal Service fund. Instead, it was mainly to voice its concerns that factors like economic growth and job creation could be stifled if VoIP was saddled with taxes and regulations at its outset.

"The problem with taxes is that once they get started, they never stop," Berthoud said. He added that even though there is a moratorium on Internet taxes, companies like Amazon.com still pay many other taxes as a part of doing business.

"Governments will not be short on revenues if there is a moratorium on VoIP," Berthoud said.Since the NTU advocates such radical steps as shutting down the IRS and scrapping the current tax code completely, it's probably not a surprise that the group doesn't want to see any new taxes imposed on new technologies and new industries. However, the group of signatories -- which includes organizations as varied as the Tennessee Tax Revolt and the Prince William Taxpayers Alliance -- doesn't have specific opinions on how issues like intercarrier compensation or Universal Service funding should be resolved.

"Those kinds of company to company transactions are really beyond the scope of the letter," Berthoud said. "We don't want a tax or regulatory regime set up for VoIP. How they get there is less important than the result."

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