EHRLICH ON WASHINGTON      Week of May 22, 2000
By Congressman Robert L. Ehrlich, Jr.

Congress Should Abolish
“Dialing For Taxes.”


Did you know that when you called your mother this past Mother’s Day you helped finance the Spanish- American War? Not literally, of course. After all, that war ended more than one hundred years ago. However, you pay a 3% tax on every phone call you make, thanks to a tax originally enacted in 1898 to help finance the Spanish-American War.

In a time of unending projected budget surpluses, the federal government cannot justify taxing citizens for a century old war. Once enacted, though, a tax is almost impossible to repeal. If nothing else, it provides a valuable lesson about how supposed “temporary” Federal programs and taxes never end. This is a mind-set I am determined to change.

Over the last century, the tax has undergone numerous changes. It was, in fact, actually phased out after the Spanish-American War ended, only to be reimposed on long distance calls in 1914. The tax was then fully reinstated to help finance World War I, after which it came roaring back as a means to increase Federal revenues during the Great Depression and later, again, to help pay for World War II, the Korean War, and American involvement in Vietnam. In fact, at the height of the Vietnam conflict, the tax was increased to 10%.

After the war years, the tax was phased down to its original 3%, only to be extended repeatedly by the tax-hungry Congress throughout the 1980's. As part of the budget deal in 1990, the tax was permanently set at 3% to cover the deficit. While the deficit is now long gone, in typical Washington fashion, the tax remains.

Originally adopted as a tax on the wealthy (only the wealthy owned phones in 1898) the tax is an especially regressive burden on low income families, as it amounts to a far larger share of their incomes than those of the wealthy. Keep that in mind the next time the Clinton-Gore Administration boasts about “taxing the wealthy.” Federal taxes enacted on the rich usually end up being paid by the poor and middle-class. The American people know this and the GOP-led Congress is taking action.

The House of Representatives will soon vote on a bill to repeal the 3% telephone tax. My Republican colleagues and I know getting rid of this tax once and for all is the right thing to do. If enough Democrats join us in a bipartisan effort to save you money and make a dent in the Washington mind-set, we will pass this bill and present it to the President for his signature. Hopefully, Mr. Clinton will join us in abolishing this ridiculous dialing for taxes.

###

This Weeks Column