If you read the actual thing instead of this stupid clickbait article the idea is to tax revenue from text messages in a similar manner to taxing revenue from phone service, so if you think taxing phone service isn't horrific then neither is this. The article is just super confused as it is like "this will probably be a flat tax, not per message" as if that is up in the air: it is a tax on revenue, so how it would seem in the end to a user would be related to how the user was being billed (per message or a flat rate for unlimited messages). Honestly, cell carriers are probably making tons of profit off of text messaging in specific that they don't deserve to make and it isn't clear to me they can pass more cost like this to a consumer as I bet they have already optimized for "what is the most we can charge", so I would be surprised if this even gets passed on to consumers at all.
> if you think taxing phone service isn't horrific then neither is this
I don't think taxing incomes is horrific. That doesn't absolve politicians of justifying raising taxes. This is a money grab. Given how wastefully California burns through cash, I'm not sure why (a) more money is needed or (b) this, specifically, is the way to do it. Why not a gas tax? Or a carbon tax? Or a tax on water-wasting crops?
(2015) California Revenue per capita is $10,408. Texas, the second largest state by economy in total money, is $10,204 per capita, the average is $10,234. Incidentally, California is very slightly "better" at 16.6% GSP than Texas at 17.1% GSP, and further better than the average of 18.3% GSP.
If this is a "money grab," they've got room for it, compared to other states -- say Delaware or most of the South, for example.
Meanwhile, California spends $4,636 per capita on the state budget, ranking 15th lowest of the 50 states. So again, not really "burning through cash."
As is mentioned every time California's or blue states' budget and spending are brought up, blue states tend to give more federal money whereas those fiscally conservative red states tend to take in more federal money.
As for if this is the way to do it; yeah, seems a little like extra taxes on faxes home phone service at this point -- diminished returns at best.
>> I bet they have already optimized for "what is the most we can charge", so I would be surprised if this even gets passed on to consumers at all.
It's a surcharge (the bill is linked down-thread). It's passed on to consumers by definition. If it works the same as MTS, it would be a statutorily capped fee. "The most we can charge" is a different number from the most a consumer would willingly pay with complete information. Surcharges are not included in advertised prices, and can therefore be used to affect price obfuscation. This is why my 34.99/mo pre-paid plan cost $48.12. Because it is a fixed amout, it also makes pre-paid plans less competitive with higher margin credit based plans.
My local only landline costs $35 a month with $10 of that being a lot of different taxes. Seems like a lot to me in this world of cheaper unlimited long distance cell phone plans, but I like the landline for having subtle, IRL like conversations with people on the phone without the lag an other problems of cell-to-cell conversation.
there is already a tax on phones, not they are merely separating each function the phone can do with the same bandwidth and taxing it. Here is a great resource for understanding just how much we are already taxed to use our cell phones [1]. Table 6 may shock you.
of course it is passed onto consumers, all taxes are. embedded taxation is how governments are able to put large tax loads on a populace without them realizing it.
Because with taxes we can discourage consumption of certain products. For instance taxes were used to discourage the production of white phorsus matches, because they melted the worker's faces.
I'm sure it's easier to snoop on SMS because we're talking about telcos, which definitely have rich histories working with the government. (Remember snowden leaks/verizon?)
Messaging apps on the other hand are what the govt generally CAN'T break into.
Yeah, going through the comments, its pretty clear how many people didn't actually read the article and are just making knee-jerk reactions based on the clickbait headline.
I thought HN readers were better than this.
> Honestly, cell carriers are probably making tons of profit off of text messaging
And calls, for that matter.
I pay $35/month to Google Fi just for text/phone. You know how many SMS messages I send per month? Probably a couple dozen. Most of my messaging is through Facebook, and it's rare for me to actually make phone calls. It's all data.
That is the cost for two lines, right? Just think of it as a baseline cell cost of having a signal. Voice and sms data is small so they just include it in the price to compete with others. Then $10/Gig for data. Does not seem so bad. I think it is a decent deal.
And yeah, it's a decent deal, especially since my data bill is capped, and international data has no extra charges. I only travel internationally once a year, but it'll be really nice when I do.
Thanks for that, the articles I've seen haven't linked it. Seems like the surcharge could be like MTS surcharge. The carrier is _permitted_ to apply a surcharge up to a defined maximum, ostensibly to defray the cost of mandated "Universal Service", emergency service, etc., but the funds are not collected by the state, and are instead kept by the telco. My MTS surcharge is about %20, before sales tax, btw.
I infer that media coverage calling this a "tax" might be sort of a telco lobbying submarine.
Edit: The more I look into this the less I know. I have had a lot of trouble finding details on who manages which fees. FCC has apparently designated several non-profit corporations to manage universal service fee funds, while some states have their own funds.* I can't find an authoritative answer to whether other surcharges are outside the scope of government management or not. Customer service won't talk about it (I tried once), and the legislation itself seems to describe what is _allowed_, but doesn't usefully summarize what is actually occurring. If anyone knows where to find more authoritative information about this sort of thing, I would like to know.
What I mean by this is that I suspect that telcos are drafting this sort of legislation, and promoting articles to "Business Friendly" news publications that call surcharges "tax" in order to deflect blame. That is more or less what I think happened with the MTS surcharge.
Oh, I see. I was thinking in terms of calling it a “tax” to kill it, since people generally hate that word. I guess they’d rather keep it quiet but that may not be an option.
"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."
So you lied and said it was a charge to help poor people have access to phones and collected almost 25x the amount needed and used it as a slush fund. Now the slush fund is less profitable although still 11x the amount needed and you want to refill the slush fund. How about no.
I seem to recall there's term for when tax revenues are strongly linked to tax expenditure. Like when you tax road vehicles and use that exact tax to maintain the road network. But I can't recall the term right now.
Seeing more of that thing, whatever it's called, seems like a desirable thing. The 'pooled funds' approach to tax/spending does lead to a lot of whacky outcomes.
Something feels off to tax an industry more when their revenue goes down. Am I missing something here other than the usual California hunger for taxes?
This is so California. I really hope this doesn't pass.
I also wonder the implications on messaging apps like WhatsApp / FB Messenger. Because if this did pass, as a Californian, I'd just switch to that full time
Slap a business tax on the telecoms and they can get tax credits for providing discounted phones to poor people. Seems inefficient to have people pay taxes to a phone company who then gives it to the state who then gives back to the phone company.
That's still dumb though. Why not start slapping taxes on every service to pay for that service for the poor? Uber eats must include a food delivery for the poor tax. Gas must include a gas for the poor tax. This is what leads to the insanity that is our tax system.
> In today’s decision, we determine in principle that the Commission should assess Public Purpose Program surcharges and user fees on all text messaging services revenue. Text messaging services consists of both Short Message Service(SMS) and Multimedia Messaging Service (MMS). SMS allows a cellular customer to send and receive messages of up to 160 characters to and from another cellular service customer[1].
> MMS is a newer service a customer can use to send text, photos and other information along with the message[1].
So this (dumb) proposed law would only cover true SMS/MMS texts, and not Signal/WhatsApp/Snapchat/Viber/WeChat/Messenger/Telegram/Hangouts/KiK/Skype/or any new apps coming out daily? The things most people are using now over regular text?
Probably because it would be challenging to tax services that are or could be located out of state or even out of country but easy to tax telecom with physical operations in state.
Also people pay nontrivial sums for telecommunication services. Easily $1200 -> $3000 per household. Taking a small portion of that money is still a lot of money. Facebook by contrast makes a lot less per user.
Disclaimer: I work for one of the apps you mentioned. This is my own opinion and not that of my company.
CPUC has the ability to regulate telecoms, but all of those apps are services that run over the internet, which is outside the pervue of the CPUC afaik. Most of them aren't making revenue on messaging either, so a revenue based tax doesn't work either.
How would it be any different than taxing voice-line service? Because that's exactly what this is--an attempt to extend Universal Service voice-line surcharges to cover text messaging service.
AFAIU I pay fixed surcharges per account but I fail to see how, say, a per-SMS tax would violate the First Amendment while taxing each individual sale of a newspaper does not.
In the U.S. we also have a constitutional right to freedom of travel but that doesn't make a gasoline tax unconstitutional.
Generally speaking, the First Amendment prohibits the government from regulating the content of speech, not the speech itself.
edit: I'm commenting on the legal aspect of it, not saying CA should tax all WhatsUp messages. But they tax bread so...
Nah, they tax TV stations and newspapers too. It's just a tax not targeted at free speech. 99.999% are "what he cheated on you again????" and "I just ate mcDonalds" type messages.
They want to tax all messages and all services so it's likely to be kosher. I pay local tax on my phone bill....free speech my @ss, just a tax.
California taxes hot food under the premise that it's been prepared at a restaurant (e.g. hot pastrami sandwich). Cold food is not (e.g. a head of lettuce) under the guise that it's less of a luxury. There is an exception for bakeries and even a hot loaf of bread is not taxed in California unless you were to eat it at the bakery.
The cynical part of me thinks they'll end up pushing people towards iMessage, Facebook Messenger, and Whatsapp...coincidentally services owned by Californian companies.
>It’s unclear how much individual consumers would be asked to pay their wireless carrier for texting services under the proposal. But it 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.
It's potentially unavoidable as carriers currently bundle text messaging w/ voice plans.
My thoughts exactly. This will push everyone to use WhatsApp or other 3rd-party tools. An unintended consequence of this would be less SMS spying by government agencies.
I don't know how you can determine they are expensive. They are unlimited and included in the plan. There is a cost of course but if I send one or one hundred thousand, it's not going to cost more.
While that's not quite how it is, I tend to agree. Also, why don't they just raise the taxes for mobile phones in general. It's an obfuscation as a money grab plain and simple.
A new law and a new tax is right up their alley, but this is the thing that got me:
> 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.
Edit: I just wanted to point out: As someone else mentioned in another thread on this article, there's an idea of "ex post facto" laws in the US constitution[1]. So considering this "an alarming precedent" when the authors of the constitution already knew of such a thing and prohibited it is a statement about our generation.
The applicability of ex post facto constitutionality to taxes aside, the effective radius of the US Constitution appears to sometimes fall just short of the California legislature[1].
> The ex post facto provision is normally interpreted to apply only to criminal laws, not to civil penalties or taxes.
FWIW, the precedent distinguishing prohibited ex post facto laws from permitted retrospective laws was established by the Supreme Court when ink on the Constitution was practically still wet, in Calder v. Bull (1798).
It has also been rolled back. I do not remember the specific case, but it dealt with the SOR requirements being extended on people long after they has been convicted and sentenced due to a change in SOR laws. The courts ruled that it did not violate ex post facto. If that doesn't violate it, then taxes definitely wouldn't either.
I think there is an applicable quote about defending scoundrels that would apply here.
An interesting side note is that many state courts have continued to strike down similar provisions, and some Federal courts have apparently also concluded that certain rules about sex offenders are "punitive" and so constitutionally invalid as outside of the Smith v. Doe rule. So this example is hard to summarize in a simple way, not least because many other courts have been trying to narrow this rule.
They'd never be that specific. If the warnings were that specific they'd actually be useful. Instead there are warnings saying an entire building contains some unknown chemicals that will have an unknown chance of giving you an unknown type of cancer.
But is it? This is probably going to be on that "Included Government Taxes and Regulatory Fees" section of your cell phone bill that has no explanation whatsoever.
I've had those everywhere I've lived in the country.
California neoliberals and their regressive tax proposals ensure the cost of social programs fall on the shoulders of everyone, ensuring the uber-wealthy are burdened to the same degree as the day laborer.
The state has a property tax freeze on its hands that charges private country clubs pennies to the dollar on what should be their fair share.[1]
This reminds me of the time in the mid-90s when the USPS wanted to charge the price of a stamp for "email". I believe this was because the word mail was used in electronic mail.
I was referring to an effort during the years around 1993-1995. I was in a 3rd world country doing humanitarian work from 1999-2000 where I had no internet access so the email chain referenced by Snopes is new to me. If I recall, the idea really was floated around/tested but, of course, never implemented because there was so much backlash.
In short, you are correct. There has never been a bill proposed that would require a surcharge or "stamp" for e-mail. The UN did suggest that a "bit tax" of 1 cent per 100 e-mails could raise over $70 billion/year, but it was never a real plan.