Finance chairman: Web rules won’t lead to new taxes

The head of the Senate Finance Committee is pushing back against analysis alleging that tough rules on Internet service companies will lead to new billions of dollars worth of new taxes. 

“I wrote the Internet Tax Freedom Act,” Sen. Ron Wyden (D-Ore.) wrote in a blog post on Thursday. “So I want to set the record straight about the false claim being peddled by opponents of net neutrality.”

{mosads}“The Internet Tax Freedom Act will protect the Internet from taxes regardless of how the FCC defines Internet access,” he wrote.

Earlier this month, the Progressive Policy Institute predicted that reclassifying broadband Internet access so that it can be regulated like a utility — as President Obama, Wyden and many others have urged the Federal Communications Commission (FCC) to do — would lead to a $17 billion tax increase on people’s bills.

According to the study, the move would allow state and local governments to place new fees on people’s Internet access, adding up to $15 billion. Another $2 billion would come from charges to fund a federal program supporting communications access for rural, poor and other areas, which is funded through fees on people’s phone bills.

Critics of the tough rules, who have long claimed reclassification would hurt the market, quickly jumped on the study as proof that it was a bad idea.

But supporters have pushed back, largely by pointing to the Internet Tax Freedom Act.

That law, which was reauthorized as part of the government funding bill that recently went through Congress, prevents state and local governments from enacting new taxes for access to the Internet. It is not mentioned in the Progressive Policy Institute study.

Wyden’s blog post was published just hours after he and 35 other congressional Democrats told the FCC that “now is the time for action” by reclassifying Web service.

“The opponents of the open Internet aren’t quitting,” he said in his blog post. 

“But the good news: neither are we.”