June 30, 2005 8:23 AM PDT

Senators want to nix 1898 telecom tax

The Spanish-American War may have ended over a century ago, but anyone in the U.S. with a telephone line is paying a 3 percent "luxury" tax created to fund the conflict in 1898.

That's a situation that a number of Republican senators would like to change. This week, they introduced a bill to repeal the Spanish-American War levy.

"Common sense dictates that repeal of the telephone excise tax is long overdue," said Sen. Rick Santorum, R-Pa. "Communication is not a luxury. It has become part of the basic fabric of our social and economic life." Other sponsors of the Senate legislation include Republicans Mike Crapo of Idaho and Gordon Smith of Oregon. A related bill is pending in the House of Representatives.

The obscure telecommunications tax took center stage in January when a congressional committee suggested the tax could be extended to include "all data communications services" including broadband, dial-up, fiber, cable modems, cellular and DSL (digital subscriber line) links. In addition, the Internal Revenue Service and the Treasury Department have said they are considering whether the tax should apply to Internet phone calls.

Congress enacted the so-called "luxury" excise tax at 1 cent a phone call back in 1898, when only a few thousand phone lines existed in the country. It was repealed in 1902 but was reimposed at 1 cent a call in 1914 to pay for World War I and eventually became permanent at a rate of 3 percent in 1990.

A few years ago, the House of Representatives voted overwhelmingly to repeal the excise tax, but the Senate never acted on the measure.

The bill introduced this week, called the Telephone Excise Tax Repeal Act, isn't the only proposal aimed at defanging the tax. Sen. George Allen, a Virginia Republican, has proposed the more modest approach of preventing the IRS from extending the tax to the Internet--but not eliminating it altogether.

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We all know why it still exist
Because it took money from US citizens and dumped it into the hands of the politicians. That's why.
Posted by bobby_brady (765 comments )
Reply Link Flag
You can bet "repealing" will cost more than the tax.
As with any bill (and especially any tax bil):

a) if they repeal the tax, 90% of congress will claim that "if we eliminate this tax, we will have to raise taxes somewhere else to make up for it" (see the Alabama Civil War widow's fund) and

b) there is a 100% chance they'll stick some rider onto the bill raising that other tax or instituting some completely unrelated legislation that increases soybean subsidies or provides funding for some lameduck senator's marble statue to be erected in his homwtown.
Posted by DaClyde (96 comments )
Link Flag
We all know why it still exist
Because it took money from US citizens and dumped it into the hands of the politicians. That's why.
Posted by bobby_brady (765 comments )
Reply Link Flag
You can bet "repealing" will cost more than the tax.
As with any bill (and especially any tax bil):

a) if they repeal the tax, 90% of congress will claim that "if we eliminate this tax, we will have to raise taxes somewhere else to make up for it" (see the Alabama Civil War widow's fund) and

b) there is a 100% chance they'll stick some rider onto the bill raising that other tax or instituting some completely unrelated legislation that increases soybean subsidies or provides funding for some lameduck senator's marble statue to be erected in his homwtown.
Posted by DaClyde (96 comments )
Link Flag
WHAT THE F*#%
How can we ever unite on anything when we can't even agree to eliminate a tax for a war almost a century ago!?!

We're doomed!! The good times are over!!
Posted by rhyssleary (35 comments )
Reply Link Flag
WHAT THE F*#%
How can we ever unite on anything when we can't even agree to eliminate a tax for a war almost a century ago!?!

We're doomed!! The good times are over!!
Posted by rhyssleary (35 comments )
Reply Link Flag
So... have we paid it off yet?
The national debt has never been $0 since the Spanish-American War, so I don't know where the Republicans get the idea that the war has been paid off. I say, keep the tax until the war it was created to finance has, in fact, been financed.

Balance the budget!
Posted by samkass (310 comments )
Reply Link Flag
Paid it yet?
Yeah that's what I heard. Either they finally paid it off after this many years or they still haven't paid the bill yet. This is just a way to score points with the no tax people when the real problem is the government keeps pilling up debts.

The National Debt clock is at damn near 8,000,000,000,000 dollars. That's the problem. Either you pay up now or you pass the buck to future generations.
Posted by Darryl Snortberry (96 comments )
Link Flag
So... have we paid it off yet?
The national debt has never been $0 since the Spanish-American War, so I don't know where the Republicans get the idea that the war has been paid off. I say, keep the tax until the war it was created to finance has, in fact, been financed.

Balance the budget!
Posted by samkass (310 comments )
Reply Link Flag
Paid it yet?
Yeah that's what I heard. Either they finally paid it off after this many years or they still haven't paid the bill yet. This is just a way to score points with the no tax people when the real problem is the government keeps pilling up debts.

The National Debt clock is at damn near 8,000,000,000,000 dollars. That's the problem. Either you pay up now or you pass the buck to future generations.
Posted by Darryl Snortberry (96 comments )
Link Flag
Old Taxes Never Die, They Just Get Re-used
To play upon a phrase made by General Douglas MacArthur.

A tax enacted, unless written to expire or requiring re-authorization, never go away.

What I would like to know what has been done with all the money collected? Is the GAO going to audit the income / expenses since 1898 and see if it has ONLY been spent on the Spanish American War, veteran benfits, World War I funding and those related expenses? Are the people collecting it and mis-using the funds going to be put in jail for mis-appropraition of Federal Funds?

This tax is like a sales tax - once enacted the funds are never accounted for and no one is responsible for use - or misuse - of them.

Which is why politicans love sales and excise taxes!
Posted by taphilo-2003685639374287843630 (130 comments )
Reply Link Flag
Old Taxes Never Die, They Just Get Re-used
To play upon a phrase made by General Douglas MacArthur.

A tax enacted, unless written to expire or requiring re-authorization, never go away.

What I would like to know what has been done with all the money collected? Is the GAO going to audit the income / expenses since 1898 and see if it has ONLY been spent on the Spanish American War, veteran benfits, World War I funding and those related expenses? Are the people collecting it and mis-using the funds going to be put in jail for mis-appropraition of Federal Funds?

This tax is like a sales tax - once enacted the funds are never accounted for and no one is responsible for use - or misuse - of them.

Which is why politicans love sales and excise taxes!
Posted by taphilo-2003685639374287843630 (130 comments )
Reply Link Flag
Taxes to finance a war
Taxes to finance a war? Novel idea. We've come a long way since the Maine - now we just use debt.
Posted by (2 comments )
Reply Link Flag
Taxes to finance a war
Taxes to finance a war? Novel idea. We've come a long way since the Maine - now we just use debt.
Posted by (2 comments )
Reply Link Flag
What About The Other Fees?
Federal Subscriber Line: $4.42
State Regulatory Fee: $0.02
Federal Universal Service Fee: $0.49
CA 911 tax: $0.02
CA High Cost Fund B: $0.07
CA Relay Service: $0.01
CA Universal Lifeline: $0.04
Fed Universal Service Fund: $0.50
Regulatory Surcharges: $0.01

The Federal Universal Service Fee was recently raised 100% to $0.02

======
$6.17 taxes, surcharges, and other fees

Basic service: $10.69
% tax = 60%

Does anybody think a 60% tax is a bit too high?
Posted by Stating (869 comments )
Reply Link Flag
Considering our debt...
Apparently it's not enough, considering the debt and yearly deficit are at record levels.

I'd be all for removing all these taxes and levies, and replacing them with increased graduated income tax that lets the highest earners pay a bigger share instead of applying levies like this flatly across the high and low wage earners. While I'm dreaming, I'd like to see interest, dividends, capital gains, and any other income that you don't "work" for to be taxed higher, not lower, than earned wages.

What's more, in my fantasy-land, the budget would balance by automatically raising income tax to meet any new spending. THAT would slow down Congressional spending increases and the financing of unnecessary wars.

Now... I can't figure out whether I'm fiscally conservative or liberal.
Posted by samkass (310 comments )
Link Flag
I totally agree! Communications taxes are way too high!
The amount of taxes and fees on cell phone and landline phone bills are ridiculously high. We need to speak out by contacting our representatives in the House and Senate. They are in current discussions about adding a Universal Service Fund tax to broadband as well. They will if we don't keep them in check.

If you don't speak up, then they will continue their trend of overtaxing everything they can get their hands on. Here are links to contact your representatives:

<a class="jive-link-external" href="http://www.senate.gov/general/contact_information/senators_cfm.cfm" target="_newWindow">http://www.senate.gov/general/contact_information/senators_cfm.cfm</a>

<a class="jive-link-external" href="http://www.house.gov/writerep/" target="_newWindow">http://www.house.gov/writerep/</a>
Posted by Juster444 (33 comments )
Link Flag
What About The Other Fees?
Federal Subscriber Line: $4.42
State Regulatory Fee: $0.02
Federal Universal Service Fee: $0.49
CA 911 tax: $0.02
CA High Cost Fund B: $0.07
CA Relay Service: $0.01
CA Universal Lifeline: $0.04
Fed Universal Service Fund: $0.50
Regulatory Surcharges: $0.01

The Federal Universal Service Fee was recently raised 100% to $0.02

======
$6.17 taxes, surcharges, and other fees

Basic service: $10.69
% tax = 60%

Does anybody think a 60% tax is a bit too high?
Posted by Stating (869 comments )
Reply Link Flag
Considering our debt...
Apparently it's not enough, considering the debt and yearly deficit are at record levels.

I'd be all for removing all these taxes and levies, and replacing them with increased graduated income tax that lets the highest earners pay a bigger share instead of applying levies like this flatly across the high and low wage earners. While I'm dreaming, I'd like to see interest, dividends, capital gains, and any other income that you don't "work" for to be taxed higher, not lower, than earned wages.

What's more, in my fantasy-land, the budget would balance by automatically raising income tax to meet any new spending. THAT would slow down Congressional spending increases and the financing of unnecessary wars.

Now... I can't figure out whether I'm fiscally conservative or liberal.
Posted by samkass (310 comments )
Link Flag
I totally agree! Communications taxes are way too high!
The amount of taxes and fees on cell phone and landline phone bills are ridiculously high. We need to speak out by contacting our representatives in the House and Senate. They are in current discussions about adding a Universal Service Fund tax to broadband as well. They will if we don't keep them in check.

If you don't speak up, then they will continue their trend of overtaxing everything they can get their hands on. Here are links to contact your representatives:

<a class="jive-link-external" href="http://www.senate.gov/general/contact_information/senators_cfm.cfm" target="_newWindow">http://www.senate.gov/general/contact_information/senators_cfm.cfm</a>

<a class="jive-link-external" href="http://www.house.gov/writerep/" target="_newWindow">http://www.house.gov/writerep/</a>
Posted by Juster444 (33 comments )
Link Flag
UK Tax
I may be wrong, but I beleive the UK Income Tax, the largest earner for the Her Majesty's Inland Revenue, was set up to fund a war against France!
Posted by djcaseley (85 comments )
Reply Link Flag
UK Tax
I may be wrong, but I beleive the UK Income Tax, the largest earner for the Her Majesty's Inland Revenue, was set up to fund a war against France!
Posted by djcaseley (85 comments )
Reply Link Flag
DOH!
According to the CBO the projected Federal Deficit now stands at 2.581 Trillion dollars. This is nearly $10,000 for every man, woman, and child in the country and these idiots are talking about reducing revenues! These neo-con nut cases are heading us headlong into a finical train wreck. What is most surprising is the working people who will be the most impacted are the strongest supporters of these clowns. Go figure.
Posted by Mister C (423 comments )
Reply Link Flag
DOH!
According to the CBO the projected Federal Deficit now stands at 2.581 Trillion dollars. This is nearly $10,000 for every man, woman, and child in the country and these idiots are talking about reducing revenues! These neo-con nut cases are heading us headlong into a finical train wreck. What is most surprising is the working people who will be the most impacted are the strongest supporters of these clowns. Go figure.
Posted by Mister C (423 comments )
Reply Link Flag
New headline change
How about this one for a headline and article?

"Senators want to nix 1898 telecom tax" to "Senators want to add new tax for people without Telephone service tax"

"The above new tax is reported to generate the same revenue as the already over taxed phone service by requiring everyone to pay Telecom taxes with or without phone service."

Just a little humour to humour our days. :)
Posted by (71 comments )
Reply Link Flag
New headline change
How about this one for a headline and article?

"Senators want to nix 1898 telecom tax" to "Senators want to add new tax for people without Telephone service tax"

"The above new tax is reported to generate the same revenue as the already over taxed phone service by requiring everyone to pay Telecom taxes with or without phone service."

Just a little humour to humour our days. :)
Posted by (71 comments )
Reply Link Flag
 

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