I think taxes are an infringement on freedom; but society needs taxes in order to fund the essential features of government that secures freedom, so I tolerate them.
To that end, "total taxes are too high" is an entirely separate argument from "we are taxing (and therefore discouraging) the wrong things."
Something has to be taxed. As people communicating online we are biased to think taxes on internet traffic are wrong, but dispassionately I don't see much of a difference between taxing traffic and taxing gas (and boy do drivers hate gas taxes). You can argue that gas taxes fund the roads that are being used, but the internet is not entirely self-funded by private enterprise.
Two points on the topic of gas taxes: (1) While it is perhaps still true that the internet is not entirely privately funded (is it?), I'd be interested in actual numbers. Most likely, the public spending on cables is ridiculously tiny compared to the public spending on roads. (2) In some (many?) countries, gas taxes are also justified by environmental and sustainability concerns: they provide an economic incentive to reduce fuel consumption. I don't see a similar concern with mere bandwidth usage. An environmentalist may bring up the power consumption of data centres, but that is a slightly different issue: bandwidth used does not always correlate with compute power used, and so it is still no justification for an internet tax.
As for "funding the Internet", no part of the Internet is publicly owned in Hungary, is it? So the Internet in Hungary is self-funded by private enterprise, right?
If Hungary offers a public Internet service, then these Internet taxes actually make perfect sense. That's actually a great way to fund a national backbone provider, I'd like to see something like this implemented in the US, if the voters are for it, of course.
[1] https://en.wikipedia.org/wiki/Window_tax
[2] https://en.wikipedia.org/wiki/History_of_the_British_salt_ta...
[3] http://en.wikipedia.org/wiki/Poll_tax_%28United_Kingdom%29
I don't think this is why we have income tax. All taxes are artificial. They're artificial rules inserted into the natural market, like how we put a bit into a horse's mouth so we can influence it's behaviour. I think the better question for any tax is: are we putting the bit into the horse's ass? It seems to me this proposal to tax bandwidth was more like that; it's just bad policy.
Capital is taxed in small number of countries (which is in my opinion unfortunate). However, most countries tax capital income, and if one agrees that taxing regular personal income makes sense, one should also tax capital income.
I don't see this as logical, because agreeing that it makes sense has nothing to do with whether it's effective or not.
Taxing capital gains reduces the amount that can be allocated into generating new wealth, which may mean lower overall tax income in the long term. I'm not saying we have it right, but that it's really very complicated.
So does taxing any other form of income. Preferentially low taxes on capital gains favors wealth accumulation by people who already derive income from capital and, at any given present revenue level, relatively disfavors wealth accumulation by people who derive income through means which are more heavily taxed, notably labor income.
This is really true of all taxes. The tax money comes out of someone's pocket and that person may have otherwise invested the money or done some other economically productive thing with it.
Trade in goods is simple and trade in services aren't that much more complicated. Taxes can be fairly easily taken from these. But intangibles like information and its transfer through cable is still a matter of debate. The pro-tax group, I'm sure, think it can easily be squeezed into the "services" camp for taxation, but data isn't that simple. A gig of files isn't the same as a gig of streaming video, but they decided to avoid the problem altogether and stick to taxing by bits. A silly move.
Why do you care? If they are online, preferably drawing pictures of young children or something, it gives them an outlet to their fetish that does not involve violently assulting children.
In a grayer and probably more nihilistic tense, even if they share already produced child pornography, all those violent assults have already been performed in the past. If it can stop future assults by giving pedophiles material in the now to sate their lust, then restricting it is just enabling more child rape because they don't have alternative outlets.
Seriously, at this point, it is all just ones and zeroes. And those don't hurt people. It is an injustice and terrible on the part of any rape victim to think lewd imagery of themselves is circulating the Internet giving pedophiles an opportunity to get it off, but it already is. And nothing we do can put the cork back on all the child porn already circulating hard drives around the world. They just use VPNs, TOR, and other anonymizing services to hide their activity that puts up a barrier to entry to less technically inclined pedophiles who then vent their frustrations out on people in the physical realm.
Let them do their thing in a dark corner of the Internet, that is still public and in the open, that is highly scrutinized by law enforcement to immediately catch and arrest anyone that commits new injustices against children, but it direly harms the potential of a free Internet to dictate policy due to the exception.
In the same vein of thought, the Internet enables terrorists and for hire murders to collude and plan violence against others. But you can do that in person. The thing with the Internet is that it does not enable anything you could not do standing next to someone - you just get information exchange anywhere. And if you cannot restrict information exchange in person, then restricting it digitally does little good and only stymies the potential of the Internet.
Of course, competent workers in social services and an adequate budget in this field are other troublesome subjects, but I do believe no crime takes place online without a real world component. Therefore, there should be real world clues to follow.
The reason that income tax is generally preferred is that it allows much more government income without effective incentives significantly. This is because the marginal utility of money seems to decrease, so for a linear increase in 'utility-payment' laborers receive a super-linear amount of money; and we can therefor tax it progressively while maintaining a constant incentive burden. This is a clear case a price-discrimination which is far from "natural" in a pure economics sense of the word.
Such an internet tax can be considered actually pretty good from these aspects: assuming it is capped (as was announced after the initial uproar) its fairly small compared to the cost of the subscription, and it is essentially collected by the ISPs, who already have the billing mechanism set up and need either licences for the frequencies they use for mobile internet, or right-of-way for the cables they use for the wired internet service and thus can easily be coerced by the government to collect this tax. (for example, income tax will be collected much less efficiently, due to tax evasion, etc.)
Of course, another aspect is what behaviour the given tax will reward / punish, and from this viewpoint such a tax (in any form) is catastrophic, but these two aspects can a lot of the "artificiality" of certain taxes.
This argument justifies all taxes that a person can afford, which makes the reasoning here obviously wrong. The exact same reasoning applies to an internet tax, a premium toilet paper tax, or a smart phone tax.
Taxes are not justified solely because people can afford them or because those taxes contribute to society. Taxes are justified on an economic basis and on that basis alone. When pooling money under government control according to some distribution scheme results in greater economic output (accounting for all externalities) than would be produced by the same money used for solely private purposes, then and only then is such a tax justified.
The near impossiblility of assessing the relative utility of each approach is why individual taxes are largely a political debate rather than an economic one.
So in practice, governments will try to tax anything that's "easy" to tax -- i.e. generate revenue while not making people protest, flee, or hide it in the black market. So you see a lot of taxes on heavily monitored, hard-to-hide, hard-to-do-without stuff, like fuel, real estate, cars, and income.[1]
There isn't much logic to it beyond, "hey this is an easy way to get revenue". And in this case, it got unusual blowback.
With that said, the political support for a tax is indeed governed by considerations of justice or "who should pay", and in this case, the answer came in the negative.
[1] Not everyone owns cars or real estate, but they use them in some way.
It seems in the US, it's used as punishment for making money.
When a new tax is introduced, it's justified? I would really like to see where all of my tax money is going and why there never seems to be enough.
How is it so?
When high income taxes in US were being introduced around Great Depression era, it was indeed argued by politicians that some fortunes are estates are so large to be immoral. However, after Reagan cuts, taxes in the US have been pretty low, and it is hard for me to grasp how one could see them as a punishment.
The reason to have income tax is to have people who can afford it contribute to society. I can see how that is a good thing.
The reason to introduce an internet tax is what? To only have people who make enough money use the internet? What kind of nonsense is that?
Please, let us agree that whenever a new tax is introduced, it is justified.
And perhaps lawmakers should ask system/OS programmers for help, because they actually can come up with good and fair rules to make complex interacting systems work as they should.