Twisted Tax Logic at Goleta Council Meeting

What's up with Onnen, Bennett and "gee I guess I'll go along with you because I'm up for reelection" Blois --- voting for a sure thing lawsuit from the County of Santa Barbara and then hedging on a small business license fee that most cities charge for a basic service?

The logic evades me. Protect businesses from a small fee because a survey we sent out says they wouldn't like it -- big surprise! -- but make sure the people of our city have to pay many thousand times more in legal fees and restitution to the County because we want your tax money all to ourselves. Also, forget Measure A and the regional government cooperation we talked about during the last election...what were they thinking? Has incorporation gone to the Trio's heads? Do they really think they can beat up on the county, kill Measure A and still have the respect of their neighbors?

For more information on the successive 3-2 votes that have been happening in Goleta over the last few months, pick up a Valley Voice now and then -- still the best place for Goleta news, despite their ownership. Here's their article on the last council meeting.

Tax the Internet? Time for a Tea Party!

Santa Barbara County Taxpayers Association Executive Director Joe Armendariz sent the following to the the media. It's interesting food for thought as VoIP technology is clearly within the realm of the Internet rather than traditional telephony.

Last week, there were a few stories on Google's possible buy of Skype from eBay. Google with their new Android cell phone operating system, free 411 and Grand Central voice mail technology could easily change the telephony landscape with wireless internet based calls that they host. Indeed, Google recently made a play with the FCC for a new part of the wireless spectrum. Does that mean we should be taxed on innovation? And, how would you tax someone that uses a proxy server in Timbuktu? -- SDLG

Below Written by Joe Armendariz from the SB Taxpayers Association

The Santa Barbara City Council "ordinance committee" (which consists of three sitting council members) voted today to move ahead with a new expanded local Utility Users Tax (UUT) which will impose a new tax on cell phone, satellite television and VoiP service.

This is an interesting issue. The question I have is whether or not new technologies such as VoiP should be exempt from taxation due to the federal governments moratorium on taxing internet access. Voice over internet Protocol (VoiP) is clearly an internet based communications technology. Why should an economically clumsy, technology illiterate municipality attempt to swoop in and force national and/or international providers like Vonage to begin collecting a local utility tax on only those customers unfortunate enough to live within a certain zip code? Because they need the revenue of course. But this will be a nightmare for the provider and impossible to enforce by the city.

Plus, VoiP service is completely mobile, all it requires is a notebook computer with an internet connection to function. There are local area codes associated with the phone numbers, but area codes cover large regions of the state and transcend individual city boundaries. Collecting this new UUT on VoiP's will prove challenging at best as subscribers simply use out of town mailing addresses to avoid the new tax.

Furthermore, the suggestion by local government officials that this expansion in the UUT is to level the existing playing field is absurd. There are other ways to level the playing field when it comes to the existing level of taxation; eliminate the current utility users tax on telecommunications service across the board…treat all information technologies equal, make them a tax free zone to help spur innovation.

Consumers are shrewd when it come to this stuff. The status quo, where some providers (COX/Comcast) services are being taxed while others (DirecTV) are not, is bad enough. Imposing a utility tax on all providers isn't the solution. Indeed, even without taxing DirecTV, the status quo places COX and Comcast at risk of losing market share as more sophisticated and especially younger consumers access all of their information and entertainment content online (YouTube/MySpace).

If local governments need the money in order to balance their budgets, which they always do, they should find other sources of revenue. Besides, what entitles local governments to tax these new technologies and information services in the first place? What public owned infrastructure exists to avail these internet based technologies to local residents? I think California should lead the way in abolishing all user taxes on local telecommunications and other information technologies to help incentivize the next generation of technological innovation.

It is worth remembering that when you tax something, you get less of it…why is the City of Santa Barbara trying to discourage innovation by taxing it? Maybe a statewide taxpayer initiative is the remedy?