
California wants to tax text-messaging - rixrax
https://www.mercurynews.com/2018/12/11/omg-now-california-wants-to-tax-text-messaging/
======
saurik
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.

~~~
JumpCrisscross
> _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?

~~~
davvolun
[https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state](https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state)

(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.

[https://en.wikipedia.org/wiki/List_of_U.S._state_budgets](https://en.wikipedia.org/wiki/List_of_U.S._state_budgets)

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.

~~~
davvolun
*faxes or home phone service

oops

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stevecalifornia
Here is a link to the raw proposed decision:
[http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M238/K227/2...](http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M238/K227/238227359.PDF)

~~~
elipsey
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.

* [https://en.wikipedia.org/wiki/Universal_Service_Fund#Adminis...](https://en.wikipedia.org/wiki/Universal_Service_Fund#Administration)

~~~
mikeash
Why would the telcos be _against_ a rule that allows them to tack on a
surcharge, blame the state, and keep the money?

~~~
elipsey
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.

~~~
mikeash
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.

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michaelmrose
"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.

~~~
uberman
Politicians love to earmark tax revenue to specific projects that people will
support. I call it the "puppies are great excuse".

The reality is that all revenue is part of giant slush bucket. Some expenses
are discretionary and some not, but the bucket to pay is what it is.

This is just the way politics and false promises work.

~~~
FooHentai
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.

~~~
FooHentai
I may have been thinking of 'direct tax' here, but it's perhaps conceptually
slightly different.

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garysahota93
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

~~~
cobookman
Can you opt out of texting to avoid said tax. If so I'd just move over to
google Voice

~~~
garysahota93
ooo, that's a great idea! I do have Google Voice, so could totally do that..

~~~
time-domain0
Most of the world uses WhatsApp to end-run around telcos (even though it's
insecure and PRISM-friendly).

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itsangaris
After you get past the clickbaity headline, it doesn't seem THAT
controversial.

The tax "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 would "help support programs that make phone service accessible to the
poor".

~~~
adrr
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.

~~~
russh
It has to be done this way so everyone involved gets to grab a little of the
vig.

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cronix
> 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?

[1]
[http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M238/K227/2...](http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M238/K227/238227359.PDF)

~~~
michaelmrose
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.

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nkcmr
If this is legitimate, this could _easily_ be classified as a violation of the
first amendment.

Yes, kind of shocking that such ideas are even being suggested, but I put low
odds on this ever seeing a vote.

~~~
inferiorhuman
First amendment? That's a rookie move buddy. Ex post facto laws are explicitly
prohibited by article 1 of the US constitution.

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simonw
"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."

Is that because people spend way less time making actual phone calls these
days?

~~~
cascom
i think its because my cell phone bill used to be ~$120/month now its
~$80/month

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bmarquez
The cynical part of me thinks they'll end up pushing people towards iMessage,
Facebook Messenger, and Whatsapp...coincidentally services owned by
Californian companies.

~~~
jonathanoliver
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.

~~~
Spivak
SMS is already ludicrously expensive compared to data rates, if consumers were
price-conscious about this they would have already switched.

~~~
paulie_a
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.

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ProAm
Isnt there already a tax on mobile phone service plans for this?

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correlator
Then once people stop texting they can tax: \- Telegram \- Whatapp \- Wechat
\- etc. etc. etc.

Good luck!

~~~
tracker1
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.

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ww520
California is being taxed to dead. It really is time for another round of Prop
13.

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bitxbitxbitcoin
“California just doesn’t stop trying to get money out of you,” Gutierrez
lamented. “What’s next?”

Stop encouraging them!

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sneakware
Also retroactive to messages sent in the past 5 years haha what a joke

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PeanutNore
Doesn't California have a massive surplus?

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hnaccy
California always wants more and more.

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yasp
California should tax email as well.

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anticensor
They just discovered specific tax for communication, which has been existed
for 19 years in Turkey. And not specific to texting.

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Eire_Banshee
This is the most california thing Ive ever heard.

~~~
cabaalis
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.

[1]
[https://en.wikipedia.org/wiki/Article_One_of_the_United_Stat...](https://en.wikipedia.org/wiki/Article_One_of_the_United_States_Constitution#Section_10:_Limits_on_the_States)

~~~
schoen
The ex post facto provision is normally interpreted to apply only to criminal
laws, not to civil penalties or taxes.

~~~
dragonwriter
> 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).

~~~
PurpleBoxDragon
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.

~~~
schoen
You're probably thinking of _Smith v. Doe_ from 2003.

[https://en.wikipedia.org/wiki/Smith_v._Doe](https://en.wikipedia.org/wiki/Smith_v._Doe)

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.

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jonathanoliver
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.

~~~
dickeytk
[https://www.snopes.com/fact-check/bill-602p/](https://www.snopes.com/fact-
check/bill-602p/)

~~~
jonathanoliver
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.

