1) How it changes behaviour (taxing something usually means less of that thing is produced, and sometimes you want less of something e.g. smoking as a classic example)
2) How much revenue it raises for the treasury after taking into account 1
I cannot help but think that on both counts this is really bad.
This seems like an absurdly high rate of taxation on a resource that if anything we want to increase the volume of. Creating disincentives for high speed/bandwidth connections and services surely means less economic activity net, which means lower revenues and profits to tax across multiple industries. You are creating very direct disincentives on economic activity in a very blunt way. Its not like you are say taxing online gambling activity which is a net social drain on society, this is everything digital/tech.
I can understand that they want to maybe tax mainly foreign tech and media firms, but this seems like the worst way to go about it with a tax that would make up the bulk of the cost to serve.
1) How it changes behaviour (taxing something usually means less of that thing is produced, and sometimes you want less of something e.g. smoking as a classic example)
2) How much revenue it raises for the treasury after taking into account 1
I cannot help but think that on both counts this is really bad.
This seems like an absurdly high rate of taxation on a resource that if anything we want to increase the volume of. Creating disincentives for high speed/bandwidth connections and services surely means less economic activity net, which means lower revenues and profits to tax across multiple industries. You are creating very direct disincentives on economic activity in a very blunt way. Its not like you are say taxing online gambling activity which is a net social drain on society, this is everything digital/tech.
I can understand that they want to maybe tax mainly foreign tech and media firms, but this seems like the worst way to go about it with a tax that would make up the bulk of the cost to serve.