Norquist: Brace for ‘gusher of new taxes’ under Internet rules

The influential anti-tax activist Grover Norquist warned Tuesday that a decision by regulators to reclassify broadband Internet would shower consumers with “a gusher of new taxes and fees.”

Norquist, the president of Americans for Tax Reform, wrote in an op-ed that the last thing people need are new taxes “triggered by bureaucrats in Washington.” 

He and the group’s state director, Patrick Gleason, said $15 billion in new state and federal taxes could be imposed per year if the Federal Communications Commission decides to reclassify the Internet as a public utility, triggering stricter regulations. 

“This move would make broadband subject to New Deal-era regulation, and have significant consequences for U.S. taxpayers,” Norquist wrote in Reuters.

The two men cited a study by the Progressive Policy Institute that found people could see a $17 per month increase in fees going toward the Universal Service Fund, which is aimed at expanding access to telephone and Internet service for rural and low-income consumers. 

Other state-based fees could come to around $70 per month, according to the report, due to “franchise fees to high-cost funds to utility user fees to state-based universal service funds.”

FCC Chairman Tom Wheeler recently said the Universal Service fee would be one issue the commission will be looking at when it determines what route to take in issuing new rules on net neutrality, the idea that all Internet traffic should be treated equally. 

The commission is slated to vote on an updated proposal in February, though the plan has not been released. 

President Obama and other advocates have been pushing the commission to adopt the strongest authority possible to enforce open Internet rules and ban companies from negotiating deals for faster service. 

Republicans and telecommunications companies have warned that reclassification could stifle innovation, and the two Republican members of the FCC have warned of higher taxes that come with reclassification.