Paying Tolls on the Information Superhighway


Canadian economist Dr. Arthur Cordell has come up with an intriguing idea about how governments may be able to survive the Information Age and deal with its most distressing byproducts -- huge numbers of people thrown out of work by automation and mounting deficits.

Dr. Cordell calls it a bit tax. He proposes that every digital bit of information flowing along the electronic highways be taxed at an amount of, say, .000001 cents per bit -- meaning one-millionth of a cent.

Since all information is rapidly becoming digitalized, the tax would take a tiny chunk of revenue out of every piece of data, every voice message, every visual image that passes through the system.

The tax would be automatically calculated by the trunk carriers and remitted to the appropriate national tax-collecting agency.

Dr. Cordell is a well-known expert on information-communications technology (commonly known as ICT or IT). He edits a newsletter on information society trends and describes himself as an "unabashed technophile."

So his proposal isn't a Luddite effort to slow or reverse technological change. On the contrary, he declares that ICT is "wonderful, liberating and amazingly productive," but argues that it can't be managed with the ideas and theories of the Industrial Age -- nor with the standard ideas about how to raise public funds and finance social services.

"We have to think about a world where ICT has made routine tasks automatic and complex tasks routine. The quality and quantity of work has changed, and the new wealth of nations is to be found in the digital information pulsing through the global information networks.

"Only by getting at the productivity that is now in those networks -- all those displaced bank clerks,gas attendants and store clerks -- can we develop new ways of gaining revenues to pay for all the new jobs that will be needed in teaching and caring areas."

Dr. Cordell says the bit tax idea originated out of conversations with communications specialist T. Ran Ide over what is going wrong,economically,in the Information Age. They were particularly puzzled by the twin problems of chronic unemployment and high deficits that bedevil so many advanced industrial countries.

"Information technology was supposed to make us wealthier,and seem to be getting poorer. We kept asking ourselves,what happened to all the wealth?And we realized that a lot of the productivity of information technology is evaporating,or going into networks."

Using the popular "information highway" metaphor,Dr. Cordell compares the bit tax to "a gasoline tax or a toll on a bridge or toll road or license plates on a car. These payments,which are really taxes,apply by the weight of the truck or the amount of gas used."

And although a millionth of a cent per bit may not sound like much,economists who have taken a preliminary look at the bit tax idea agree on one thing:it would generate a huge amount of money.

Dr. Cordell admits to feeling "a certain missionary zeal" about his idea,but at this point the zeal is aimed at getting it discussed and evaluated rather than getting it passed into law.

He floated it at a recent economic conference in Belgium,and is currently shopping it around in on-line computer conferences -- giving it a test drive,so to speak,on the information highway.

The first responses have been guardedly favorable from various economists and techies but there has been nothing like the huge public debate that generally accompanies new tax proposals. Dr. Cordell plans to convene a round-table of fiscal types to think about how the proposal might work in practice.

One issue to explore is whether the tax would simply get "passed along" to end users -- people paying for cable TV services,for example -- like a "user pay" tax. If so,Dr. Cordell acknowledges that certain affected interest groups -- such as telephone and cable companies -- may take a strong dislike to the proposal.

Dr. Cordell's biggest concern is over how any revenues the bit tax generates will be used to address the employment impacts of ICT. Most of all,he wants them to fund a radically new exploration of how to "plan for a new world of work and working."

Walter Truett Anderson,author of "Reality Isn't What It Used To Be" and other books on environment and technology,is a political scientist. He is a contributing editor for Pacific News Service,for whom he wrote this commentary.

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