Copyright 2000 Chicago Sun-Times, Inc.
Chicago
Sun-Times
May 26, 2000, FRIDAY, Late Sports
Final Edition
SECTION: NEWS; Pg. 29
LENGTH: 497 words
HEADLINE:
House votes to dump telephone excise tax
SOURCE: DENNIS
COOK; ASSOCIATED PRESS
BYLINE: BY JANET HOOK
DATELINE: WASHINGTON
BODY:
Congress helped finance the Spanish-American War by
slapping a luxury tax on something owned by fewer than 1,500 households:
telephones.
The war was won more than a century ago, and phones are
everywhere. So on Thursday, Congress moved to abolish a tax that critics say is
an anachronism and an obstacle to increasing access to the Internet.
The
House on Thursday voted 420-2 to approve a bill that would repeal the 3 percent
excise tax paid by families and businesses on telephone service. The Senate is
expected to follow suit soon.
The measure would trim $ 5 billion a year
from the nation's phone bills. With 94 percent of all households now equipped
with phones, the excise tax affects 99.1 million households. It is levied
against most major forms of telephone service, including local and long distance
service, directory assistance and cell phone service, as well as installation
and repairs.
The bill would eliminate the phone tax gradually, ending it
by Oct. 1, 2002.
"This is a great example of how, in Washington, once a
tax is imposed . . . it is almost impossible to get rid of it," said Rep. Rob
Portman (R-Ohio).
The tax cut is pocket change compared with the $ 792
billion, 10-year tax relief package Republicans were seeking last year. One
House member checked his phone bill and found that repealing the
telephone tax would save him only 97 cents a month.
Still, on Capitol Hill the repeal is viewed as rich in political appeal
in this election year. It is backed by phone companies and high-technology
interests that can be potent sources of campaign cash.
The Clinton
administration backs the repeal concept but says the bill should be considered
in a broader context of competing budget and tax-cut priorities. Despite that
note of caution, the measure's supporters say it is hard to imagine that
President Clinton would veto the bill in the face of overwhelming bipartisan
support in Congress.
Many Democrats oppose the tax because, like all
flat-rate taxes, it hurts the poor more than the rich.
Republicans want
to repeal it as part of their current strategy of pushing tax cuts in small,
more digestible bites than the sweeping tax-cut package that Clinton vetoed last
year. These targeted tax cuts include a $ 28 billion, five-year cut in
inheritance taxes approved by the House Ways and Means Committee on Thursday, as
well as reducing the so-called marriage penalty, which causes many couples who
file joint income tax returns to pay more than if they filed as individuals.
During Thursday's House debate, many argued that the phone tax hampers
the burgeoning electronic economy by adding to the cost of access to the
Internet.
Some skeptics scoffed at such comments, saying that the phone
tax is too small to significantly affect computer access.
"Massive tax
relief!" said a sarcastic Rep. Gerald Kleczka (D-Wis.). "Great day!"
The
two House members who voted against the bill were Pete Stark (D-Calif.) and John
Murtha (D-Pa.).
GRAPHIC: House Speaker J. Dennis
Hastert and men dressed as Rough Riders arrive on Capitol Hill on Thursday. The
Rough Riders were a volunteer cavalry regiment organized to fight in the
Spanish-American War, the conflict the phone tax was enacted to fund 102 years
ago. ; LOS ANGELES TIMES
LANGUAGE: English
LOAD-DATE: May 31, 2000 
