Los Angeles Voters Pass Updated 'Communications' Tax, May Include DATA

Proposition S expands city's current telephone tax from simple land-line and most cell-phone calls to include the routing of voice, audio, video, data or other communication information transmitted through fiber-optic coaxial cables, power lines, broadband, DSL or wireless systems.

This past "Super Tuesday" election day some 66% of voters in Los Angeles decided to vote for Proposition S and expand the city's telephone tax to include both video and data in order to counter declining land-line revenue and shore up other budget shortfalls.

On the one hand, the proposition reduces the city's telephone users tax from 10% to 9%, but on the other it expands it to include modern technology such as Internet phone use. Proposition S basically allows the city to tax the routing of voice, audio, video, data or any other type of communication information transmitted through fiber-optic coaxial cables, power lines, broadband, DSL or wireless systems.

It reads:

Shall an ordinance be adopted to reduce the City’s tax on communications users from 10% to 9%; modernize the ordinance to treat taxpayers equally regardless of technology used.

Yet, what qualifies as "communications" is unclear. It will undoubtedly include Skype and other VOIPs as well as internet, DSL, PCS and other electronic services. What this all means is that Los Angelenos will be paying a monthly tax to fund city services while at the same time creating a financial barrier that prevents low-income people from accessing the Internet?.

"(Proposition) S is critical to our efforts to keep crime at historic lows in this city, and we are encouraged the residents of Los Angeles are responding," Mayor Antonio Villaraigosa said late Tuesday.

Los Angeles has apparently taxed telephone services since 1967 and has allowed the tax to evolve with technology to include, for instance, both cell phones and video teleconferences. But, this new proposition expands the tax to include, for the first time ever, DATA it would seem.

Surely there has to be a better way. Maybe Los Angeles ought to ask for some of its property taxes back from California legislators rather than "modernizing" taxes on "communications" and technology.