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18 Media L. & Pol'y 1 (2008-2009)
Investing in Economic Growth: Broadband Network Tax Forbearance

handle is hein.journals/medilpoy17 and id is 3 raw text is: FALL 2008, 18 MEDIA L. & POL'Y INVESTING IN ECONOMIC GROWTH: BROADBAND NETWORK TAX FORBEARANCE by Larry F. Darby* Joseph P. Fuhr Jr.** I INTRODUCTION This paper argues, and concludes, that raising taxes on broadband and related telecom network services will directly and indirectly destroy more value for taxpaying citizens than expenditure of the funds can reasonably be expected, or been analytically shown to create. Put differently, the paper inquires and answers whether broadband tax forbearance is a good government investment. Private or public investment is generally warranted if its expected value over time exceeds its expected (mainly current) cost. The greater the expected return, the greater the impetus to invest. Forbearing broadband taxation is a form of public investment, which, when compared to other forms of taxation and/or expenditure plans, most likely will yield very attractive returns. Federal, state and local fiscal authorities routinely tailor expenditure plans and programs to reflect not only short term needs, but also to foster long-term growth and development via capital expenditures for infrastructure development. This includes streets, sewers, buildings, schools, medical facilities, sports facilities, and other projects. The rationale for government expenditure of taxpayer dollars for long-term capital development programs is straightforward. Investment of taxpayer dollars is warranted when the present value of future benefits from the investment expenditure can reasonably be expected to be greater than the present value of the alternative, but foregone, private or public expenditures. Other considerations matter, but a major * President, Darby Associates; Fellow, The American Consumer Institute, a 501(c)3 organization formed to advance an economics-based consumer welfare platform in information technology, communications and related matters. ** Professor of Economics, Widener University; Fellow, The American Consumer Institute.

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