Wireless tax legislation under consideration by Congress could provide a...
Wireless tax legislation under consideration by Congress could provide a launching point for future tax reform, even if it won’t reduce already high taxes on wireless imposed by state and local governments, said panelists at a Hill briefing Monday sponsored…
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by the DCI Group. The House and Senate, on a bipartisan basis, are considering identical bills (CD March 11 p19) to impose a 5-year moratorium banning new discriminatory taxes on wireless. The bill doesn’t go far enough, but the idea is to immediately cease the growth in taxes and then deal with the problem, said National Black Chamber of Commerce President Harry Alford. Alford supports the bill and will testify Tuesday at a hearing on the wireless tax bill in the House Judiciary Courts Subcommittee. It’s easier to stop new taxes than to take money away from the government, said Scott Mackey, an economist with KSE Partners. The legislation would provide a “time out” allowing supporters of wireless tax reductions to “hopefully work with the states,” Mackey said. The tax issue should be a “low-hanging fruit” for policymakers, unlike intercarrier compensation, a “much less clear-cut issue,” said Joseph Miller, policy counsel for the Joint Center for Political and Economic Studies. Mackey said the average U.S. consumer pays 16.3 percent of their wireless bill for wireless taxes and fees, compared to 7.4 percent average on sales tax. And wireless taxes and fees are growing at a rate three times faster than sales tax, Mackey said. The taxes have a disproportionate impact on low-income and minority communities, run counter to government efforts to increase wireless deployment, and hurt businesses by raising their costs, he said. Alford said the taxes hurt the poor because their budgets aren’t as flexible to bill increases. States are treating wireless like cigarettes and other luxury items, “when in fact it’s a necessity,” he said. It makes no sense to impose high taxes on wireless when IT is a major contributor to the national GDP, added American Consumer Institute President Steve Pociask.