Tax hungry Los Angeles goes after broadband access with a misleading ballot initiative

We devote a lot of space to condemning the duopoly for all of their misleading ads, contracts and terms. Governments are no different. Recently Los Angeles put a candle in a cowpie and sold it to voters as a birthday cake. Most of the LA media was too busy following Britney Spears to notice.

Los Angeles this week passed a controversial new tax that should impact city VoIP users, reports the Inland Valley Daily Bulletin. Fearing the need to cut police services, the city took an existing telephone user tax, reduced it from 10% to 9%, but expanded the tax to include Internet phone services.

Apart from lowering the tax 1 percentage point, it swaps in broad language that covers a wider range of telephone-like technology and allows the city to tax the routing of voice, audio, video, data or other communication information transmitted through fiber-optic coaxial cables, power lines, broadband, DSL or wireless systems.

Locals are concerned that the new tax could ultimately be expanded in an attempt to tax Internet access. The decline in landlines and the spike in VoIP use essentially allowed Los Angeles lawmakers to pass off a tax hike as a tax cut to voters on “super Tuesday”. This is how the tax on VoIP was presented to local voters (pdf): (from Braodband Reports)

If you are a large scale user of VoIP in El Lay it may be time to move. If you are a VoIP provider and you don’t want to rebuild your billing & payables systems to support this, then it’s time to quit serving El Lay. If you’re a broadband user or provider, you’re next, and no vote is needed to stick it to you. We don’t mean to beat up on Los Angeles. Their government is no more clueless than most other big cities. The more heavily you tax the productive, the more likely they are to flee.