Posted on 08/01/2006 7:45:48 AM PDT by neverdem
I am proud of the legislation I have co-sponsored and voted for to help families keep more of the money they earn.
One of the bills that lessened the burden of taxation on American families, which I was excited to co-sponsor this year, repealed the excise tax on telephones and other communications services (H.R. 1898).
For over 108 years, the federal government has turned just about every phone call into a bad prank. You may or may not have noticed an item on your bill known as the federal excise tax (FET) or “telephone tax.” The telephone tax has been 3 percent since 1982.
The telephone tax was originally enacted as a temporary measure to pay for the Spanish-American War in 1898. At that time, the telephone tax was viewed as a tax on wealthy Americans.
At the end of the 19th century, only the wealthy had telephones. Therefore, taxing telephone service was viewed as a luxury tax and a progressive tax.
President Reagan once famously said, “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”
In reality, few things are harder to get rid of than a tax once it has been passed into law. Witness the telephone excise tax.
The Spanish-American War barely lasted one year. Images of Teddy Roosevelt and his Rough Riders should be the most enduring images of the 19th century’s final conflict.
In fact, the telephone tax turns out to have outlived TR by nearly a century. However, the telephone tax has been changed frequently since its inception.
Specifically, the telephone tax was briefly repealed after the Spanish-American War but returned during World War I.
It was again repealed in 1924, but returned again in 1932. Between 1944 and 1954 the tax rate was at its highest, 15 percent on local service and 25 percent on long distance, to pay for World War II.
In 1965, Congress voted to slowly phase out the tax. Although the rates were adjusted, the tax was never ended. In 1990, the rate was permanently adjusted to 3 percent. Congress tried to repeal the tax again in 2001.
Finally, this year, Congress voted to end the telephone tax permanently. Today, a telephone is no longer a luxury but a necessity, and the telephone tax had become antiquated.
It is no longer a progressive tax but a regressive tax. Since most people have a phone, it takes a disproportionately large share of income from those who need a telephone but are less able to afford the tax.
Technology has also presented issues that made the telephone tax increasingly impractical. The tax will stop showing up on consumers’ bills effective July 31, 2006.
Further, when consumers file their 2006 taxes (in April 2007), they will get back the past three years of telephone taxes (that is the statute of limitation on tax matters).
Here are the details:
• Taxpayers can claim refunds of all excise tax they have paid on long distance service over the last three years.
• The refund will not include tax paid on local telephone service.
• Taxpayers will claim the refund on their 2006 tax returns filed in 2007.
• The IRS will provide a standard refund amount for individuals to use. This will eliminate the need for taxpayers to dig through old telephone bills.
• The IRS is developing a new form for taxpayers to file if they choose to claim a refund based on the actual amount paid.
• The IRS will also provide a method for taxpayers who normally are not required to file income tax returns to claim a refund of the tax.
Although the Spanish-American War ended in August 1898, the telephone tax born of that era lived for 108 years. It is an important reminder that once a tax is passed, it doesn’t surrender easily.
Finally, on July 31, 2006, the last chapter of the Spanish-American War and the temporary telephone tax to pay for it will end.
Rep. Mike Turner, R-Centerville, represents Ohio’s Third Congressional District.
"Waiter, another bottle of your best champagne!"
I don't know about you guyz, but my BellSouth bill is about 50% "Government Mandated and Authorized Charges" and "Surcharges and Other Fees."
Oh, about 100 years from now when the internet has been replaced by something else...
Oh, about 100 years from now when the internet has been replaced by something else...
"If I could I would cancel my phone."
You can, have you looked at Prepaid Cellular? My wife pays $8.33 per month for 24 to 83 minutes of air time with Cingular (No Tax). I pay $5.99/month plus 0.10/minute with Sprint/Nextel (Approx. $2.00/mo. tax).
Skype works great, too if you have a cable modem.
I agree, this is cereal.
At least it is a start.Manny more to go.
Hey, phones are old fashion. Why tax phones anymore when one can tax the Internet?
I'd cancel if I could, too. $50 phone bill and only $8 was long distance charges. The rest of the bill was for taxes and fees.
"So House Resolution 1898 repeals a tax started in 1898 ?
This articles a joke right ?"
Vanity resolution numbers ? I did not know they did that.
Next thing you know folks will be picking their own license plate numbers.........
LOL! But that would a billion dollar idea for a business name, well at least in the "red states".
"If the RATs had there way we would still be paying this tax in the 23rd century."
But now they can say its just another Bush tax cut for the rich.
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