Discriminating Against Satellite TV Consumers
Monday, August 4th, 2008 By Marc Kilmer
The National Taxpayers Union has published a letter supporting a repeal of Ohio’s tax on satellite TV. From the letter:
As you may recall, a special 5.5 percent tax on TV viewers getting their signal from a satellite service was approved five years ago. However, cable users were exempted from the tax. Two viewers could be enjoying the exact same TV program, but one would be paying more in taxes if they’re relying on a satellite dish instead of a cable hook-up. And the resulting bill isn’t insignificant — satellite customers have forked over $100 million in extra taxes since 2003, with another $40 million expected in 2008 alone. Consumers shouldn’t have to pay higher taxes just because they use satellite instead of cable.
While we don’t endorse legislation at the Buckeye Institute, we do agree with the idea that the same products should not be taxed differently. Proper tax policy should set tax rates low and should not single out certain products for extra taxation. It makes no sense for satellite TV consumers to pay this tax while cable consumers do not. Some take this logic to mean that cable TV viewers should be taxed more. NTU takes apart this argument, too:
Some have suggested applying the tax to all TV services as a way to bring about parity. Levying higher taxes on everyone improperly focuses the debate over tax discrimination on a form of “fairness” that only fills government’s coffers further — that is, making sure providers of similar services suffer the misery of equally harsh taxes. The “fairest” fee or tax rate — for providers and taxpayers alike — is zero.
Telecommunications of all varieties have been targets for disproportionate and punitive taxes since the Spanish-American War, slowing much of the progress and productivity that could have emerged to enrich our society sooner. Ohio should reject old-school parochial tax treatment that favors some over others and allow products to compete equally on their merits. Customers should decide who makes the grade in the marketplace, not government.
Tags: Telecom
