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What if the government taxed you to be on social media? Would it discourage you from using social media? I heard a similar thing about paying tax for email but I have not seen it. What do you think?

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Short answer: politically and technically unlikely in the U.S., but not impossible in other jurisdictions — and governments have already chosen different routes to tax the digital economy.

As and note, there is precedent for weird, long‑lived levies (the federal telephone excise tax began as a Spanish–American War levy and the government stopped collecting the long‑distance portion in 2006). Treasury press release, May 25, 2006. The viral “e‑mail tax” stories from the late 1990s/2000s helped prompt clear legal pushback: the U.S. barred Internet‑only taxes under the Internet Tax Freedom Act, which was made permanent in 2016. Permanent Internet Tax Freedom Act (text).

Practical obstacles make a per‑user social‑media tax a poor policy tool. Measurement and cross‑border enforcement would be costly; per‑use or flat user fees tend to hit lower‑income people proportionally harder (indirect/consumption taxes are typically regressive); and administration/compliance costs can swamp revenue for micro‑levies. See OECD analysis of consumption‑tax incidence. OECD — Consumption Tax Trends.

Policy choices since 2015 show the path governments prefer: levy revenues where money is booked (corporate or revenue‑based “digital services taxes” at the firm level) or use VAT rules for online sales, and pursue an international allocation solution under the OECD two‑pillar framework rather than taxing individual users. The UK’s DST guidance is a concrete example of a revenue‑based approach. HMRC Digital Services Tax manual. OECD two‑pillar statement (Oct 8, 2021).

Takeaway tied to the thread: the “tea tax” analogy captures the politics well — unpopular levies provoke backlash and can have unintended technical and distributional consequences. In practice, governments and platforms have tended to shift costs via corporate taxes, VAT-style rules, or commercial subscription models rather than metering individual social‑media users.

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Member Avatar for MktgRob

I think this would be an incredibly bad idea, on the same level as taxing tea back prior to the War of Independence. And the government would have a lot more than tea dumped in a harbor to worry about as I think the hackers and the other web-mayhem makers would wage a full-out assault on government servers and websites in response.

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Yes, but I just heard yesterday that many rebate checks have to be paid back so you never ever know what extent government will take to expunge extra cents from tax payers. There is even a funny website dedicated to what Governor Patterson (NYS) would tax.

Member Avatar for MktgRob

I know what you mean. I remember back in the first term of George W., the Republican majority in the Senate but forth a bill to end a tax that was applied to the use of every phone in the country with the taxes raised to be used to fund the military. At the time, the Democrats were arguing against increased spending for the war and it struck me as strange that they were fighting to keep this tax in place. As I researched it I learned that the tax went on the books in the 1890's to fund the Spanish-American war (at the time of the Spanish-American War there were not a lot of phones in the country) but as more homes got phones (many multiple phones), the revenue from this tax was being used for all sorts of spending but was being reported as war funding. So for an extra 100 years the government was collecting taxes on a war that had ended 100 years ago but they could not give up the revenue stream.

Edited by MktgRob because: clean up a thought
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OMG - I am laughing so hard. This is really funny. Thanks for the chuckle. Damn, I bet you the majority of today's HS students wont know about the Spanish American War. I betcha the total revenue generated with that single tax was probably more than the GDP of certain countries.

Member Avatar for MktgRob

From what I remember when I read about is, the initial tax during the Spanish American War generated a few hundred thousand dollars in revenue. When it was finally killed it was generating a few hundred million per year and it mostly went to pet projects that never made it past the smell test the first time they were voted on.

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