California Democrats Draft New Bill to Tax Text Messages
Liberal state plans to start taxing texts to pay for phone services for low-income users
California Democrats are drafting a new bill aimed at taxing text messages to raise money to pay for cheap phone services for low-income residents.
Regulators in the liberal state are working on a plan to charge cell phone users a fee for sending text messages, allowing them to collect additional taxpayer money to fund programs for low-income residents, according to the San Jose Mercury News.
The exact charge that cell phone users would have to pay hasn't been revealed, but the report states that fee would "likely would be billed as a flat surcharge per customer — one of those irksome fees at the bottom of your wireless bill — not a fee per text."
The plan has been blasted as "a dumb idea" as Californian lawmakers appear intent of levying taxes on everything in the state.
According to the Daily Wire, cell phone users may even have to retroactively pay the fee for the last five years.
Business groups, including the Bay Area Council, California Chamber of Commerce and Silicon Valley Leadership Group and others opposing the idea, calculated the new charges for wireless consumers could total about $44.5 million a year.
But they add that under the regulators’ proposal the charge could be applied retroactively for five years — which they call “an alarming precedent” — and could amount to a bill of more than $220 million for California consumers.
A dense California Public Utilities Commission report laying out the case for the texting surcharge says the Public Purpose Program budget has climbed from $670 million in 2011 to $998 million last year.
But the telecommunications industry revenues that fund the program have fallen from $16.5 billion in 2011 to $11.3 billion in 2017, it said.
“This is unsustainable over time,” the report says, arguing that adding surcharges on text messaging will increase the revenue base that funds programs that help low-income Californians afford phone service.
The News said the California Public Utilities Commission is set to vote next month, but added that some business councils object to the plan.
“It’s a dumb idea,” Jim Wunderman, president of the Bay Area Council business group, told the paper.
“This is how conversations take place in this day and age, and it’s almost like saying there should be a tax on the conversations we have.”
State residents also object, calling the planned tax “dumb” and “unfair.”
“To have them charge us something else is just dumb,” a Bay Area resident told KNTV.
“I think it’s very unfair, especially for the people that can barely pay for their cell phone plan already.”
But CTIA, which represents the U.S. wireless communications industry, said in legal filings to the commission "that texting is an information service like email, not a telecommunications service subject to the commission’s authority."
“Subjecting wireless carriers’ text messaging traffic to surcharges that cannot be applied to the lion’s share of messaging traffic and messaging providers is illogical, anticompetitive, and harmful to consumers,” the CTIA said in its filings.
The News also reported that the Federal Communications Commission "is expected to affirm that Wednesday at a meeting, the CTIA said, which would confirm that the state utilities commission 'has no authority to impose surcharges on text messaging.' "
Earlier this year, Democratic lawmakers in California put forward a plan to force some businesses to give half of the savings they accrue from the newly-instituted tax cuts back to the state.
State Assemblymen Kevin McCarty (D-Sacramento) and Phil Ting (D-San Francisco) want to impose a tax surcharge on companies in California “making more than $1 million,” according to SF Gate.
The surcharge instituted by their proposal, ACA22, would transfer the funds accrued by the state to state government programs for middle-class and low-income families.
“Trump’s tax reform plan was nothing more than a middle-class tax increase. It is unconscionable to force working families to pay the price for tax breaks and loopholes benefiting corporations and wealthy individuals," Ting said in a statement.
"This bill will help blunt the impact of the federal tax plan on everyday Californians by protecting funding for education, affordable health care, and other core priorities.”