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ReleasesMay 12, 2000
WASHINGTON, D.C. -- Saying the outdated federal excise tax on telecommunications is the equivalent to a "Mother’s Day tax" this Sunday, U.S. Rep. Ed Royce (R-CA-39) called for its immediate abolition. Royce is a cosponsor of a bipartisan bill [H.R. 3916] that does just that.
"Mother’s Day is the busiest day of the year for phone usage. Sons, daughters and others will call their special person to wish them a happy Mother’s Day. But those calls will unfortunately include a special federal excise tax which will add an extra $15 million on Mother’s Day alone," Royce said.
He noted that the money spent on this federal "tax on talking" could be put to better use on Mother’s Day. "Fifteen million dollars would mean Americans would have 300 million more minutes to call mom," Royce said. "They could buy mom seven million more Mother’s Day cards, more than 500,000 gardenia plants, or over 1.3 million boxes of Godiva chocolates."
Congress first enacted a telephone excise tax in order to help pay for the 1898 Spanish-American War, which lasted only five months. At the time, this "temporary" tax amounted to a penny on long-distance phone calls costing more than 15 cents. Over the years, the federal phone tax has survived efforts to phase it out and scale it back. Congress made it a permanent 3 percent tax on telecommunications services in 1990.
"The federal telephone tax was originally instituted to pay for the Spanish-American War. As far as I know, that war ended more than 100 years ago. This tax should have ended with it," Royce said. "We must send a message that no longer will ‘temporary taxes’ be permanent. Kill this unnecessary tax."
Of the 105.4 million households in America, 99.1 million (94 percent) have telephone service. This telephone tax repeal would provide tax relief to every one of those households. Additionally, due to the rapid pace of technological change, the difference between traditional telecommunications, the Internet and other technologies is increasingly unclear. If the federal phone tax remains on the books, it would jeopardize recent efforts to keep the Internet free from taxation.
"This is a tax only a government could love," Royce said. "Your mother would not approve of your ‘Uncle Sam’ profiting from your wishing her a happy day and thanking her for all she’s done."