The Wall Street Journal gives credit to Sen. McCain for trying to protect consumers from excessive, confusing, and duplicate taxes on wireless communications, aka mobile phone service. While Mr. McCain must share the credit with Reps. Zoe Lofgren and Chris Cannon, he was indeed the first to press for a halt in the states’ shameless milking of your cell phone bill. His Cell Phone Tax Moratorium Act, introduced in January, proposes a three-year moratorium on new cell phone taxes that unduly burden wireless consumers, compared with other communications services.
If anything, this initiative (clearly modeled on the Internet Tax Moratorium, which has done a pretty good job of restraining taxes on Internet service per se) is long overdue. As the Heartland Institute points out, wireless taxes rose four times faster than other taxes (aimed at goods and services) between 2003 and 2007. Sen. McCain cites the figure of 17 percent as the average state-local combined tax burden on wireless. The average sales tax, by contrast, runs under 7 percent.
There is nothing new about government chasing the hottest growth industries as a revenue source. Politicians should realize, though, that growth in any industry automatically generates more revenue without special targeted taxes and fees. Higher company profits, a bigger wage base, and more customers means more money rolls in from income, sales, and use taxes. Hitting up the winners in economic competition just increases the risk the party will stop sooner rather than later: if you want to keep benefiting from the robust growth wireless generates, don’t cut off the industry’s oxygen supply.(…more)
On Tuesday a bill to ban new cell phone taxes was introduced into the House. Rep. Lofgren (CA-16) led the bill as the sponsor, with seven cosponsors: Cannon (UT-3); Chabot (OH-1); Cohen (TN-9); Eshoo (CA-14); Keller (FL-8); Meeks (NY-6); and Sensenbrenner (WI-5).
Today, Rep. Zoe Lofgren (D-CA) introduced the bi-partisan, pro-consumer “Cell Tax Fairness Act,” which provides for a 5-year moratorium on any new discriminatory wireless tax or fee. A typical consumer already pays 15.19% in federal, state, and local taxes on their cell phone bill as compared to 7.07% for most other taxable goods and services. Between January 2003 and July 2007, the effective rate of taxation on wireless service increased four times faster than the rate for other taxable goods and services. The bill does not disturb current state and local taxes on wireless service. (more)
Continually mounting cellphone taxes are a major grip of mine. My cell phone taxes have gone from $2 to well over $10 a month. I’m glad someone’s addressing it.
I’ve heard about the idea of regular cell phones making calls via Wireless-Internet(WiFi) signals for many years, but this is the first mainstream product I’ve seen that actually does it. This thing is neat, check out the video!
