Cell phone tax started more than a century ago


Old taxes never die, they just pile up
I did not know this.

There is a call to repeal a cell phone tax most people probably don't even know they are paying, NewsChannel5 partner ONN reported.

Anybody who has ever tried to decipher a cell phone bill knows how tough it can be. One of the charges is a 3 percent fee on every cell phone bill in America. The origin of the tax predates the invention of the cellular phone by nearly a century.

Annie Brinkman and her friend, Stacey Lemle, don't know it, but every time they use their cell phones, they are supporting the war effort -- the Spanish-American War.

The 1898 war involved Teddy Roosevelt and the Rough Riders.

The fee began as a luxury tax on phones at the turn of the 19th Century. And we're all still paying for it today.

Phone bills don’t specify that the tax originates from the Spanish-American War. It is labeled as the federal excise tax, which amounts to 3 percent of every monthly bill.

"When you say it's a federal excise tax, you know, most of the time, oh it's the federal excise tax," said Laura Merritt of Verizon Wireless. "And that's just understood that it's a tax you pay. Where exactly those funds go is something that's a mystery to all of us."

It's not such a mystery anymore. And now, at least three federal courts have ruled the tax illegal. Many cell phone companies support a repeal of that tax. But they say they are caught in the middle.

I assume that the Spanish-American war has been paid for.

I wonder, doesn't that mean that we are entitled to refunds?

It's a good example of why luxury taxes are a bad idea.

Hat tip to Nobody's Business.

— NeoWayland

Posted: Wed - January 18, 2006 at 05:39 AM  Tag


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