1898 Spanish American War Telephone Tax Goes Digital
From the pages of CNet we have another example of why Americans don’t vote for new taxes, even if the tax is limited to just a few years:
A report prepared by the Congressional Joint Committee on Taxation proposes extending a 100-year-old tax on phone service to some or all data connections. The tax originated in 1898 to pay for the Spanish American War. After being repealed, it was reinstituted to pay for World War I and was eventually set at 3 percent.
With the decline of traditional phone service, the committee is investigating ways of adding to federal tax revenues. The report outlines several approaches to an extension of the tax, including one that would levy the 3 percent rate on all data communications.
The report says, “… all data communications services to end users,” including broadband; dial-up; fiber; cable modems; cellular; and DSL, or digital subscriber line, links. ” would be taxed. Currently, the 3 percent excise tax applies only to traditional telephone service.
James Maule, professor of tax law at Villanova University, is skeptical that Congress would push for such an extreme measure. He suggested that the committee’s goal of including that as one option is to make the others “look a bit more palatable.”
Read the whole CNET article of 28 January 2005 and then read this statement by Representative Christopher Cox of Orange County, California on repealing the entire tax.
I’m with Mr. Cox. Either let the tax decline to the point it should be repealed or repeal it now. Wat’s say you? Commenting is available below.
