Hidden cell phone taxes

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HARRY C. ALFORD

Governments—federal through local—are run by revenue. The source for their revenue is taxation. Their management is best when the revenue is low and worse when there is too much revenue. Too much revenue breeds corruption, waste, ineptness and disorder. That is why the last stimulus we had was a total failure. There was just too much money being manipulated and the nation did not improve at all. I want to discuss one of the stealth ways that government uses to stick us up for more taxation.
The subtle way of revenue raising is the cell phone taxes. From the federal government down to your local town, governments are taking advantage of the popularity and success of our wireless devices. To tax cell phones is bad enough but the salt going into the wound is the fact that they are continuing to rise. According to economist Scott Mackey, “a recent study shows that the average American wireless consumer now pays 17.18 percent in monthly wireless taxes and fees. That’s up from 16.26 percent since the last time he looked at these numbers in 2010.
That means that for your wireless service every month, you’re paying a tax rate nearly two and a half times higher than the average general sales tax rate (7.33 percent) that you’d pay if you bought another taxable good or service. Yes, there are 47 states where wireless users like you are being hit by federal, state, and local governments with excessive taxes and fees.
There has been a noble attempt to stop this madness. The Wireless Tax Fairness Act was introduced in the House of Representatives by Reps. Zoe Lofgren, D-Calif., and Trent Franks, R-Ariz. If passed, this bill would prohibit any local and state governments from adding any more taxes on wireless users for five years. It sailed through the House (230 co-sponsors and unanimous voice vote) and was picked in the Senate by Ron Wyden, D-Ore., and Olympia Snowe, R-Maine. However, our do nothing Senate has it stalled in the Senate Finance Committee. Somehow we have got to get moving again.
What are some of the ways to hit us up with these taxes?
The big one is the Universal Service Fund. According to State Tax Notes: “The federal USF is administered by the Federal Communication Commission, with open-ended authority from Congress. The program subsidizes telecommunication services for schools, libraries, hospitals, and rural telephone companies operating in high-cost areas.” You pays a rate of 5.82 percent of your monthly wireless bill. Now, some states are starting to charge a State Universal Service Fund in addition to all other taxes that are assessed.

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