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 Sunday, May 4, 2008
In Praise of the Email Tax

Today -- oops, yesterday, but only because I'm posting just after midnight -- is allegedly the 30th anniversary of spam. The number surprised me, but this article cites an unsolicited email on the early Arpanet in 1978.

Here's a contrarian and mostly non-rhetorical question: Why is there such a vehement and vociferous opposition to a tax on email? I mean, sure, I can understand people don't like the idea. No tax is ever popular, and nobody ever wants something that's free to become unfree. I just don't get why the negative reaction is so immediate and so absolute. After all, we tolerate taxes and fees on so many other things -- electricity, phones, banking, ATMs, cable television, etc. People grumble about these, but it doesn't prompt huge letter-writing campaigns to Congress urging them to pass a bill promising to never pass a tax that no one was even proposing in the first place. Fees on cell phones are outrageous, but somehow they get by. Why aren't people as outraged about taxes on their phone as they are by taxes on their email?

A page on Snopes tells of the notorious (and fictitious) Bill 602P. This was an alleged proposal before Congress to impose a tax on email. The fact that no such bill existed did not stop the public from expressing their opposition to the plan for years, so outraged were they. Hillary Clinton was even asked about it in a debate when she ran for the Senate in 2000. (She was opposed, and so was her opponent.)

I'm intrigued by this little mention on the Snopes page:

The 1999 Human Development Report issued by the United Nations' Development Programme did suggest that a "bit tax" of one U.S. cent on every 100 e-mail messages sent worldwide could raise over $70 billion a year to fund the development of computer technology infrastructures in developing countries, but this was merely a pie-in-the-sky suggestion, not a concrete plan for member nations to adopt and implement.

Set aside for now any question of how such a tax would be imposed. Let's just pretend that it is. Would this be such a bad thing?

I'm sure I send more email than most individuals, but even for me it's rare that I'll send more than 20 in a day, and those only when I have a general announcement to send to a large list. But let's suppose I send 50 a day. That's 50 messages times 30 days, for a grand total of 15 cents a month added to my bill. That's barely even noticeable. It's not even one-fortieth of the taxes and fees on my monthly cable bill.

But it would be noticeable by anyone who sends thousands of emails, and that's why I'm in favor of it. Advertising is highly price-sensitive. I used to do temp work at an advertising agency that specialized in direct-mail. They are extremely aware of their piece cost and their response rate. If each piece costs 30 cents to produce and deliver, and your response rate is 1 out of 200, you just paid $60 for each successful response. Depending on what you're advertising, you probably lost money.

But with email the piece cost is nearly zero, and so you can have a terrible response rate and still come out ahead. You can send your viagra ad to 100,000 recipients, and if just one makes a purchase, you've recouped your cost. This is why we have spam. Advertising exists because it works. Spam works because the piece cost is so ludicrously low that you can annoy 99,999 people and still make money. With the email tax, those 100,000 messages now cost an extra $10. Not a lot, but enough to change the profit equation.

Charging one cent per 100 emails sent is not going to end spam, but it would trim some of the more egregious spam at a trivial cost to everyone else. Why not do it? Better yet, reshape the tax a little so that it's one cent per ten emails but exempt the first 100 sent each day. Now, that Viagra mailing costs $99.90 but you as an individual pay nothing at all (unless you're the sort of person who likes to send "Hey, check out this funny YouTube I found" to your 100 closest friends, in which case you might want to consider that maybe you're a bit of a spammer yourself).

I know I haven't addressed the question of how such a tax would be implemented. I can see some difficulties there, but I'm not convinced it's completely impossible -- particularly since I don't even care if it is successful in raising revenue. It seems to me to be something worth looking into, at least.

12:00:29 AM  [permalink]  comment []