Eliminate the 1898 phone tax.......
Lawmakers laud Treasury for abolishing phone tax
Lawmakers on both sides of the aisle and telecom companies exalted Thursday at the Treasury Department’s decision to abolish collection of the 3 percent excise tax on long-distance telephone calls, which a years-long lobbying campaign had dubbed the “Spanish-American War Tax” because of its creation to pay for the 19th-century conflict.
Treasury opted to eliminate the tax rather than continue tangling in court with multiple lawsuits by phone companies seeking permission to stop levying the tax. The regulatory relaxation comes as AT&T, Verizon and other telecom giants remain on the political defensive, with Congress prepared to hold hearings on their participation in the National Security Agency's controversial call-monitoring operations.
Taxpayers will be free to apply for a refund on up to three years of back long-distance taxes, including interest, starting with the 2006 tax cycle, Treasury Secretary John Snow said in a statement.
“The telephone-excise tax has outlasted two world wars, the Great Depression, and the start of two new centuries, but the federal government continued to needlessly tax basic telephone services,” House Majority Whip Roy Blunt (R-Mo.), one of the tax’s most vocal congressional opponents, said in a statement.
Speaker Dennis Hastert (R-Ill.) issued a similar response, underscoring the intensity of lobbying by fiscal conservative groups such as Grover Norquist's Americans for Tax Reform to end the tax. “It is past time for the federal government to stop taxing the phone lines that link American taxpayers to this antiquated burden,” Hastert said.
“Customers should see a noticeable difference in their phone bills within the next few months,” said Herschel Abbott, BellSouth vice president of government affairs, in a statement. “We hope this decision is a harbinger of removal of other discriminatory taxes on communications customers.”
Despite the joint announcement yesterday by Treasury and the Internal Revenue Service, only congressional action can permanently end the tax. Senate Finance Committee Chairman Chuck Grassley (R-Iowa) hailed the three-year refund but said he intends to pursue legislation in the near future to repeal the tax. GOP members of both the House and Senate already have introduced bills to that effect.