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FOR IMMEDIATE RELEASE
May 25, 2000
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House Votes 420-2 on H.R. 3916

USTA Applauds Overwhelming Congressional Support
For Repeal of ‘Tax on Talking’

Washington, D.C. -- The United States Telecom Association (USTA) today praised Members of Congress who voted overwhelmingly in support of repealing the federal excise tax (FET) on telecommunications services. By a vote of 420 to 2, the House of Representatives passed H.R. 3916 introduced earlier this year by Representatives Rob Portman (R-Ohio) and Robert Matsui (D-Calif.).

Originally imposed in 1898 as a "temporary luxury tax" to help fund the Spanish American War, the "tax on talking" is the 3 percent tax levied on the phone bill of every telecommunications service consumer. Unlike other excise taxes, like the "sin" taxes imposed on alcohol and tobacco, the revenues from the "tax on talking" are not earmarked for any specific purpose, but rather go into the U.S. Treasury's general fund. The tax has attracted widespread opposition not only because it is outdated and without purpose, but also because it is regressive, impedes growth in the important technology sector, and runs counter to bipartisan efforts to keep access to the Internet tax-free.

"We are extremely pleased to see such strong support on this important legislation to end an outdated and regressive tax," said Roy M. Neel, USTA president and CEO. "USTA will continue to work vigorously along with the bipartisan coalition for the immediate removal of this tax. We encourage members of the Senate to quickly pass similar legislation (S. 2330) introduced by Senators Roth (R-Del) and Breaux (D-La)."

More than 94 percent of all Americans subscribe to telephone services, so this tax affects nearly all Americans. The repeal of the 3 percent telephone tax will save consumers over $5 billion annually.

For more than 100 years, USTA has been representing the interests of the small, mid-size and large companies of the nation's local exchange carrier industry. The association represents more than 1,200 companies worldwide providing local exchange, long distance, wireless, Internet, and cable services.

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