The Volokh Conspiracy - Internet Porn Tax:

My friend and colleague (and fellow Kozinski clerk) Victor Fleischer (Conglomerate) writes (see the post itself for links):

Paul Caron points me to S.1507, a Senate bill that would impose a 25% excise tax on Internet porn.

Is it good policy? I'm sure my libertarian friends will freak out, but the policy doesn't sound so bad to me. The bill is premised on the notion that teenagers are heavy consumers of internet pornography, and teenagers and younger children are often victims of the industry. These are unfortunate negative externalities of the product, and taxing a harmful product is one way to reach a socially optimal outcome without having to regulate the activity out of existence. Funds generated by the tax will go to things like a cyber-tip line and a task force to investigate internet-related crimes against children.

Complicating matters is the bill's questionable constitutionality. The Supreme Court has not been friendly to Congressional attempts to regulate internet porn. And the Supreme Court has, in the past, struck down taxes that differentially burdened constitutionally protected speech. See Minneapolis Star v. Minnesota Commissioner of Revenue, 460 U.S. 575 (1983). Still, the tax here seems targeted at addressing the negative externalities caused by the activity, not at stifling the speech for the sake of stifling speech. It probably helps that the funding is mostly earmarked for law enforcement activities, not general revenue. What's not at all clear is how Congress came up with the number of 25% and whether this bears some reasonable relation to the externalities caused by the activity. It is an excise tax based on revenue, and surely if the number were 100% the Court would strike down the bill as an unconstitutional restriction of protected speech. I don't know enough First Amendment jurisprudence to know how hard the Court will scrutinize the reasonableness of the tax and how it is targeted, and my semi-educated guess is that the tax would survive scrutiny, but it seems likely that an Internet Porn tax will be subject to judicial scrutiny in a way that a fat tax would not be.

Of course, this being Congress, there's some question whether dedicating funds to cyber-tip lines, etc. is mainly for show. The wheels start to fall of the wagon as you move further down the bill. The tax will generate a lot of money, and perhaps the bill's drafters were struggling to figure out where to send remaining funds. Section 212(a)(6)(A), after moving down the cascade of recipients past law enforcement, R&D (to develop better filtering software) and educational training, includes the following provision:

(A) FEDERAL AGENCY SUPPORT- 50 percent of remaining amounts shall be used to provide funding to support child Internet safety activities, as well as activities combating sex trafficking and sex crimes against children, on the part of the following Federal agencies:

(i) Department of Justice.
(ii) Department of Commerce.
(iii) Department of Defense.
. . . (xiii) National Aeronautics and Space Administration.

Yes, to protect children from sex crimes and sex trafficking, let's get NASA on the case. We all know what happened when Cartman was abducted by space aliens, and your child could be next.

I'll take up Victor's First Amendment invitation: The law seems probably, though not certainly unconstitutional. Content-based taxes on the sale of First-Amendment-protected materials (and recall that the law targets not just unprotected and illegal obscenity, but also constitutionally protected pornography) are generally forbidden, see Arkansas Writers' Project v. Ragland (1987).

Nor does it matter whether the government is trying to "address[] the negative externalities caused by the activity," as opposed to "stifling the speech for the sake of stifling speech." I don't think this sort of motivational distinction really works: Most times that the government seeks to "stifl[e] speech," it does so precisely because it sees speech as causing "negative externalities"; the two motivations aren't antonyms. And (perhaps because of this) the Court has specifically held that unconstitutional discrimination "can be established even where, as here, there is no evidence of an improper censorial motive. . . . Illicit legislative intent is not the sine qua non of a violation of the First Amendment."

Content-based taxes, like other content-based restriction, can generally be upheld only if the government can show that the law is necessary to serve a compelling government interest. But even if the interest in raising money to fight the allegedly harmful effects of Internet pornography (I take no position here on whether Internet porn is in fact substantially harmful) is compelling, it's pretty clear that content-based taxes aren't necessary to serve that interest; taxes that are unrelated to speech would do the job just as well.

The strongest defense of the tax would be that pornography, including constitutionally protected pornography, is different: Though it has some constitutional value, it's of lower value, and may therefore be more broadly restricted. The Court has seemingly adopted this view in some of its "erogenous zoning" cases and broadcast regulation cases.

Nonetheless, the Court has at other times disapproved of this "low-value speech" position; and more recently it has generally judged content-based regulations of nonobscene pornography pretty much as it has judged content-based regulations of fully protected speech. My guess, then, is that if the law is eancted, both lower courts and (if it comes to this) the Supreme Court will ultimately strike this tax down just as they would other content-based taxes.

	[Eugene Volokh, August 5, 2005 at 1:28pm] Trackbacks Internet Porn Tax: My friend and colleague (and fellow Kozinski clerk) Victor Fleischer (Conglomerate) writes (see the post itself for links): Paul Caron points me to S.1507, a Senate bill that would impose a 25% excise tax on Internet porn. Is it good policy? I'm sure my libertarian friends will freak out, but the policy doesn't sound so bad to me. The bill is premised on the notion that teenagers are heavy consumers of internet pornography, and teenagers and younger children are often victims of the industry. These are unfortunate negative externalities of the product, and taxing a harmful product is one way to reach a socially optimal outcome without having to regulate the activity out of existence. Funds generated by the tax will go to things like a cyber-tip line and a task force to investigate internet-related crimes against children. Complicating matters is the bill's questionable constitutionality. The Supreme Court has not been friendly to Congressional attempts to regulate internet porn. And the Supreme Court has, in the past, struck down taxes that differentially burdened constitutionally protected speech. See Minneapolis Star v. Minnesota Commissioner of Revenue, 460 U.S. 575 (1983). Still, the tax here seems targeted at addressing the negative externalities caused by the activity, not at stifling the speech for the sake of stifling speech. It probably helps that the funding is mostly earmarked for law enforcement activities, not general revenue. What's not at all clear is how Congress came up with the number of 25% and whether this bears some reasonable relation to the externalities caused by the activity. It is an excise tax based on revenue, and surely if the number were 100% the Court would strike down the bill as an unconstitutional restriction of protected speech. I don't know enough First Amendment jurisprudence to know how hard the Court will scrutinize the reasonableness of the tax and how it is targeted, and my semi-educated guess is that the tax would survive scrutiny, but it seems likely that an Internet Porn tax will be subject to judicial scrutiny in a way that a fat tax would not be. Of course, this being Congress, there's some question whether dedicating funds to cyber-tip lines, etc. is mainly for show. The wheels start to fall of the wagon as you move further down the bill. The tax will generate a lot of money, and perhaps the bill's drafters were struggling to figure out where to send remaining funds. Section 212(a)(6)(A), after moving down the cascade of recipients past law enforcement, R&D (to develop better filtering software) and educational training, includes the following provision: (A) FEDERAL AGENCY SUPPORT- 50 percent of remaining amounts shall be used to provide funding to support child Internet safety activities, as well as activities combating sex trafficking and sex crimes against children, on the part of the following Federal agencies: (i) Department of Justice. (ii) Department of Commerce. (iii) Department of Defense. . . . (xiii) National Aeronautics and Space Administration. Yes, to protect children from sex crimes and sex trafficking, let's get NASA on the case. We all know what happened when Cartman was abducted by space aliens, and your child could be next. I'll take up Victor's First Amendment invitation: The law seems probably, though not certainly unconstitutional. Content-based taxes on the sale of First-Amendment-protected materials (and recall that the law targets not just unprotected and illegal obscenity, but also constitutionally protected pornography) are generally forbidden, see Arkansas Writers' Project v. Ragland (1987). Nor does it matter whether the government is trying to "address[] the negative externalities caused by the activity," as opposed to "stifling the speech for the sake of stifling speech." I don't think this sort of motivational distinction really works: Most times that the government seeks to "stifl[e] speech," it does so precisely because it sees speech as causing "negative externalities"; the two motivations aren't antonyms. And (perhaps because of this) the Court has specifically held that unconstitutional discrimination "can be established even where, as here, there is no evidence of an improper censorial motive. . . . Illicit legislative intent is not the sine qua non of a violation of the First Amendment." Content-based taxes, like other content-based restriction, can generally be upheld only if the government can show that the law is necessary to serve a compelling government interest. But even if the interest in raising money to fight the allegedly harmful effects of Internet pornography (I take no position here on whether Internet porn is in fact substantially harmful) is compelling, it's pretty clear that content-based taxes aren't necessary to serve that interest; taxes that are unrelated to speech would do the job just as well. The strongest defense of the tax would be that pornography, including constitutionally protected pornography, is different: Though it has some constitutional value, it's of lower value, and may therefore be more broadly restricted. The Court has seemingly adopted this view in some of its "erogenous zoning" cases and broadcast regulation cases. Nonetheless, the Court has at other times disapproved of this "low-value speech" position; and more recently it has generally judged content-based regulations of nonobscene pornography pretty much as it has judged content-based regulations of fully protected speech. My guess, then, is that if the law is eancted, both lower courts and (if it comes to this) the Supreme Court will ultimately strike this tax down just as they would other content-based taxes.