Wednesday, March 15, 2006

History of The Telephone Excise Tax

The Telephone Excise Tax is a great lesson we should teach all of our children about; we should also instruct all voters about this tax as well...

The Telephone Excise Tax was first instituted in 1898 to help fund The Spanish American War. The tax was a "temporary tax." It was a luxury tax designed to specifically tax the wealthy. The tax ran from 1898 - 1901.

The Telephone Excise Tax was re-instituted in 1917 to help fund World War One. It ran again from 1917 - 1924.

The Telephone Excise Tax was re-instituted a third time in 1932. In has been in effect ever since.

The Telephone Tax was originally portrayed as both a "Temporary Tax" and as a "luxury" tax.

We have been paying this "temporary tax" since continuously since 1932 and the rate keeps increasing. Telephones are no longer a luxury...

Here is a copy of my phone bill from January:
Residence Line $17.56
Voice Mail $6.95
Distinctive Ring (For fax) $4.25
Taxes $10.47

Here is a breakdown of the taxes:
Telecommunications Service Charge $.03
Federal Universal Service Fee $.67
911-County $.7
Interstate Access Charge $6.5
State Tax at 6% $1.7
Federal Excise Tax at 3% $.87

My total bill was $39.23, of that $10.47 was paid in various taxes. Almost 27% of my total phone bill was paid in taxes!

Please take the time to check out your phone bill. Let me know what you think!

2 comments:

Anonymous said...

Hey life fares better on the cell phone bill - my plan costs $40 per month and only $5.73 is charged for federal and state taxes. That is only 14.325% tax.

And here is the curious thing the IRS will not allow you to deduct your primary phone line for business use of the home expenses becuase they consider you will have that regardless if you work from home or not - doesn't sound like they consider it a luxury there do they?

CoffeeBigPlz said...

I think it is TIME to rid ourselves of the crap on the phone bill.

In our house we are trying out skype. Between Skype and the cell phones we'd LOVE to dump the land line, even if it means an antenna on the house to improve reception.

It is insane!