HOUSE VOTES TO REPEAL TELEPHONE EXCISE TAX -- (House of Representatives - May 25, 2000)

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   (Mr. TAUZIN asked and was given permission to address the House for 1 minute.)

   Mr. TAUZIN. Mr. Speaker, I am very pleased that today while I was conducting a hearing in the House Committee on Commerce on broad band legislation, that the House is moving to pass an important piece of legislation to help the Internet community and all telephone consumers of America. That was a bill to repeal the 3 percent telephone tax that has been on the books as we know on and off since the Spanish American war. The telephone tax operates as a tax on the Internet because much of the Internet service flows over the telephone. As a result, this 3 percent tax collected originally to fund the Spanish American War and left on the books for lo these many years had to go.

   Today, the House joined in large numbers in repealing that tax. I want to congratulate the House in making that great decision today. In fact, a study done by the Progress and Freedom Foundation indicates that over the last 12 years, telephone taxes have gone up in this country 62 percent, that telephone taxes, that taxes on the business of talking to one another in this country have risen a remarkable 62 percent. That includes State, local and, of course, Federal taxes. When the combination of all these taxes mount up on a person's telephone bill, it means in effect that more and more people cannot afford to be on the Internet.

   In fact, the Progress and Freedom Foundation estimates that well over 20 percent of America will not access the Internet because of the high level of telephone taxation. Now, what is ironic about that is that we live in a country that prides itself on free speech. In fact, the first amendment to our Constitution is an amendment that protects American's right to free speech, in effect protects our right to free speech against the Government infringing upon it.

   I want you to think about that for a second. In this wonderful free speech society that prides itself and in fact brags about free speech around the world, we in America tax speech in many jurisdictions of our country more than we do tobacco. In other words, the taxes on telephones in many jurisdictions of America are higher than the taxes on tobacco, which is supposed to be a sin product. Speech is supposed to be honored and respected in America. In this great House we honor and respect the right of free speech in our wonderful debates on the great issues of the day.

   Yet our government taxes talking on a telephone so high that it amounts to more than the taxes on tobacco in many parts of America. You would think we would honor speech by getting rid of those taxes, lowering those taxes; and so this House began today that process. By eliminating the 3 percent excise tax on talking on telephones, we hopefully have begun the process to honor and respect free speech again in our society. Eliminating this tax is going to save millions of Americans many millions of dollars over the years that unfortunately has been taken from them as they use their telephones or connect to the Internet.

   More importantly, as we repeal this 3 percent telephone tax, we will be making access to the Internet more affordable for many people in this country. Think about telephone taxes another way. It is one of the most regressive forms of taxation you can possibly

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imagine, because we all use the telephone. We use it to keep in touch with our loved ones; we use it constantly in our businesses. Everyone uses the telephone. And in a real sense, when you talk about taxes being progressive or regressive, this is the most regressive tax that I can possibly imagine. Everybody pays it. The poorest of Americans who use the telephone pay a higher percentage of taxes with telephone taxes than they do in any other form.

   So this House really has done America a great favor. I am proud tell you that it was in 1998 that the gentlewoman from Washington (Ms. DUNN) and I filed the first bill to repeal the Spanish American 3 percent telephone tax. It has taken a few years, but this House today agreed with us. We are delighted in fact that the House has now sent to the Senate a bill to end this 100-year-old Spanish American War tax. I want you to know the Spanish can breathe easy tonight. The war is over. We have ended collecting a tax that ran that war. We should be very proud in fact that we are finally taking the right path in making both telephone and Internet service more affordable for people and getting rid of some of this heavy burden of excessive and regressive taxation on the folks in America who use the telephone.

   We have only just begun. As we go through the process of trying to make sure that the Internet is free and accessible for more and more people, free of these heavy taxation burdens, our committee and the Committee on Ways and Means will continue to see whether or not we can hopefully give Americans even more relief from taxation. In that regard, Mr. Speaker, our efforts will continue. We are going to look seriously at possibly putting some kind of limitation on the FCC's ability to constantly raise taxes', and one day just hopefully one day we will honor and respect free speech in America the way our forefathers intended.

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