"nothing is stopping governments from taxing physical, tangible things." When information is the product of the new economy, and where value is created, it has

"nothing is stopping governments from taxing physical, tangible things." When information is the product of the new economy, and where value is created, it has to be part of the tax base. "Nothing is stopping governments from taxing the gross revenue (such as the WA state business and occupation tax) of ISPs and telecoms in general." True, but this layer of the value chain is not where the new information economy is being developed. "Where this breaks is when they start deciding to tax specific types of internet content at TCP/IP layer 3" 'Content' and 'Layer' are separate issues - they are intertwined for pragmatic reasons, and I agree doing it at 'an internet layer' is dumb ... but there's no clear way around it.