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   Mr. BURNS. Mr. President, I rise today to express my support for a bill which I have co-sponsored. The bill, S. 2330, will repeal federal excise taxes on telephone services.

   This tax was first introduced as a temporary luxury tax in 1898 to fund the Spanish American War. However, over 100 years later this tax remain in effect. The definition of temporary should not span an entire century.

   This tax is imposed on telephone and other services at a rate of 3 percent. Furthermore, these taxes are not applied to a specific purpose that enhances telephone service in our nation--rather these taxes are directed in the general revenue account. In other words, there is no reason we shouldn't repeal this tax. It means only one thing--Montanans end up paying one more tax to encourage government spending.

   As I said a moment ago, this tax was enacted to fund the Spanish American War. Considering that war was ended a mere six months after it began, I feel its time to repeal this tax. Instead, Montana consumers continue to pay this tax on all their telephone services--local, long distance, and wireless.

   It is time to eliminate this excise tax. At the time of enactment, this tax was considered a luxury tax on the few who owned telephones in 1898--this tax has now become an unnecessary burden on virtually every American taxpayer. Repealing this excise tax on communications services will save consumers over $5 billion annually.

   Furthermore, this tax is regressive in nature. It disproportionately hurts the poor, particularly those households on either fixed or limited incomes, Even the U.S. Treasury Department has concluded in a 1987 study that the tax ``causes economic distortions and inequities among households'' and ``there is no policy rationale for retaining the communications excise tax.''

   Rural customers in states like Montana are also disproportionately impacted. This tax is even more of a burden on rural customers due to the fact that they are forced to make more long distance calling comparative to urban customers.

   This tax also impacts Internet service. The leading reason why households with incomes under $25,000 do not have home Internet access is cost. If consumers are very price sensitive, the government should not create disincentives to accessing the Internet. Eliminating this burdensome tax can help to narrow the digital divide.

   Mr. President, this is a tax on talking--a tax on communicating--a tax on

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