One less tax, many more to go
This kind of issues will never seize to amaze me. A tax being collected many decades after the justification for the tax is no longer valid. It is even worse when the tax forcing hold on technological development since the tax is based on old technology. But here is a case where logic might win after years of struggle.
Link: U.S. May Stop, Refund Excise Tax on Phone Service
No tag for this post.The law — originally enacted to help pay the costs of the Spanish-American War — taxes telecom services based on both the duration of a call and the distance it travels. But the changing nature of technology now lets phone companies offer flat rate per minute or monthly plans. The government, however, has continued to assess the tax under the old services, sparking widespread protest.
When the tax was enacted in 1898, telephone service was something of a luxury and the levy affected relatively few Americans. As telecommunications expanded to become a fixture of modern life, the tax has become a steady revenue stream that administrations of both political parties have been loath to surrender. In 2000, Congress repealed the tax, at an estimated five-year cost of $24 billion. Former President Clinton vetoed the measure over budget concerns.
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