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Sin Tax on Text?

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TextingIs texting a sin? I’m looking at the tax angle. With the way some legislators are pushing a “fee” on text messages, you’d think that text messaging was a vice, perhaps even as bad as alcohol or tobacco. Texting is certainly pervasive, and the revenue stream it generates can cause some to salivate, particularly when anticipating tasty pork perquisites.

Proponents say the tax or fee revenues will be used for specific purposes; health, education, and other noble ends. While the intentions seem good, we’re all too familiar with how increased revenues and spending by the central government often results in inefficiency and “directly unproductive profit-seeking” activities (DUP), a nicely neutral academic term for graft and corruption.

Take, for example, health centers that run out of supposedly free medicine, when the very same meds just happen to be available at low prices at the hole-in-the-wall botica (drugstore) around the corner. Strange coincidence? How about nutritious noodles purchased wholesale by government at twice their retail shelf price, or disposable textbooks that are hardly worth the cheap newsprint they’re printed on.

My favorite story has to do with donated computers. When one public school received their allocation, they discovered they didn’t have space for the PCs! This shouldn’t be surprising. If public schools have a classroom shortage, would they have space for computers? So, the school administration launched an energetic fund drive, soliciting voluntary contributions from each and every single student in order to build a computer room. Do you believe any solicitation by a public school administration is really “voluntary”? Yet a further tribute to the creativity and ingenuity engendered by DUPs.

On the other hand, when private corporations are “too successful,” their very success tends to trigger Robin Hood instincts. What is “excessive” profit? Is there such a thing as “too profitable” in a free-market economy?

Setting aside that debate for the moment, let us assume that using a portion of those profits to temper the social volcano would be a good thing. Let’s say that it would even be better if the appropriated monies would also expand the business base and profits for those from whom these monies are taken. Is this too idealistic a win-win scenario? Let’s see.

One “greater good” that is being sought is Universal Internet Access. Most will agree that the Internet is an empowering technology and that providing widespread access to this technology is desirable. While it may seem obvious that many of us have fully entered the Internet Age, there remain people unable to enjoy its benefits. The reason being that, outside major metropolitan conurbations, there are still places where provision of Internet access may not be commercially feasible.

Some solutions have been put forward for providing broad Internet access, particularly in under-served areas. One of these was the proposed government-run National Broadband Network (NBN). But the ZTE scandal clearly highlights the pitfalls of big-budget government projects. Generally, you really want to avoid large, expensive government projects, particularly in situations where the private sector can do a better job.

It so happens that Dr Emmanuel Lallana and the folks at IdeaCorp [www.ideacorpphil.com] have an idea. In order to avoid being duped by DUP, Dr Lallana proposes that any funds not be channeled through government—at least not right away. Nor are they recommending a government owned and controlled corporation (GOCC), as those tend to be inefficient and will likely suck subsidies from the national government.

Rather, IdeaCorp’s idea is to have private corporations set aside a portion of their profits for developing Internet access in remote, under-served areas. The private ISPs themselves will manage this fund and build the needed infrastructure. Aside from the side benefit of contributing positively to corporate social responsibility, it is also hoped that wider Internet usage will redound to the benefit of the ISPs themselves, as well as the communities and the economy as a whole.

Details will certainly have to be worked out, but here we have at least one good alternative to just another tax. If you want to see some public good emerge from all those texting revenues more government taxation and management is not the best option. A program managed by the private sector is certainly worth careful consideration.

Print ed: 07/09


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