April 6, 2000

Manzullo Co-Sponsors Bill to Eliminate Federal Telephone Tax

[WASHINGTON] Congressman Don Manzullo (R-Egan) today co-sponsored legislation to eliminate the 3 percent federal tax Americans pay each month on their telephone bills.

Congress first enacted a telephone excise tax in 1898 to help pay for the Spanish-American War. Over the years, this tax has survived efforts to phase it out and scale it back, and Congress made it a permanent 3 percent tax on telecommunications services in 1990.

Unlike federal gasoline taxes and airline ticket taxes which go for building roads and improving airports, the federal telephone tax is not used for improving telephone systems. All of the $5 billion in revenues collected annually from the federal telephone tax simply go into the general fund to pay for other programs.

The Phone Tax Repeal Act (HR 3916), which Manzullo co-sponsored today, would eliminate the federal telephone tax. It would provide tax relief to the 99.1 million American households which currently have phone service.

STATEMENT

“This is a perfect example of an unnecessary federal tax. For more than 100 years, Americans have paid this tax for talking on the phone. And none of the revenues have been used for improving the phone system.

“The taxes are simply charged to the people and are thrown into the general fund to pay for federal programs that have nothing to do with the use for which they are charged. The time has come to eliminate this useless tax on talking.”