FOR IMMEDIATE RELEASE May 25, 2000 NEWS FLASH: THE SPANISH-AMERICAN WAR IS OVER!
House Votes to Eliminate 102-year-old Telephone Excise Tax Enacted to Finance Spanish-American War
WASHINGTON – First District Congressman Paul Ryan today voted in support of the Phone Tax Repeal Act, which would eliminate a three percent federal excise tax on telecommunications services, including telephone service for consumers. The repeal passed the House of Representatives by a vote of 420-2.Congress originally enacted the telephone excise tax to help pay for the Spanish-American War in 1898. At the time, this “temporary” tax amounted to one penny on long-distance phone calls costing more than 15 cents. It affected few people – only about 1300 Americans owned phones – and was considered a luxury tax. Needless to say, times have changed. The vast majority of Americans own telephones, and the excise tax costs lower-income consumers a higher percentage of their income than middle- or higher-income consumers.
“The Spanish-American War has ended – so should be the tax that funded it,” said Congressman Ryan. “One of the most permanent things in life is a temporary tax from Washington. The phone tax had outlived its usefulness long ago and was placing an unnecessary burden on all Americans. Lower-income families were hardest hit because the tax took a larger bite out of their budgets,” said Ryan.
Over the years, the federal phone tax has survived efforts to phase it out. The federal government had difficulty letting go of this steady revenue source, which costs consumers more than $5 billion each year.
“Today’s repeal is consistent with our efforts to lower the cost of telecommunications and remove barriers to the Internet. With over 95% of households accessing the Internet through telephone lines, this tax amounted to a tax on Internet access for those Americans. Lowering access costs is important for both consumers and businesses, who have become increasingly dependent on the Internet for communication and commerce,” said Ryan.
For additional information, or to schedule an interview with Congressman Ryan, please contact Kate Dwyer at (202) 225-3031.