Internet tax plan to finance US war on terror

A tax on new internet and mobile services could be levied to help pay for President Bush's war on terror.

A tax on new internet and mobile services could be levied to help pay for President Bush's war on terror.

The US Congress Joint Committee on Taxation has suggested that the existing 3% telecommunications tax could be extended to all forms of modern communications, including broadband, mobile phones and voice over IP.

The Bush administration is considering ways to raise taxation to pay for the war, and the congressional committee says extending the 3% tax from traditional phone services to newer voice and data technologies should be considered.

Introduced in 1898 to pay for the costs of the Spanish-American War, the existing tax was subsequently used to pay for the country's involvement in the First World War.

The congressional committee’s report comes after the US Internal Revenue Service said it was considering how the same tax could be applied in a way to take into account modern-day communications.

Microsoft, Intel and VoIP company Skype have all publicly opposed a tax on VoIP.

Read more on Voice networking and VoIP

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