A so-called temporary federal tax that’s survived into three centuries is long overdue to be abolished, according to Iowa Senator Chuck Grassley. He says the telephone excise tax, which has added three-percent to our phone bills for decades, needs to be eliminated.
Grassley says “It’s an opportunity to do away with quote-unquote a temporary tax, which means nothing, because this tax has been around since 1898.” Grassley, who chairs the Senate Finance Committee, has scheduled a hearing Wednesday (at 9 A.M./Central) to consider killing the telephone excise tax.
Grassley says “It was used to pay for the Spanish-American War because it was meant to be a tax on the rich because back in 1898, only the wealthy had telephones.” Legislation to phase the tax out was passed by Congress in 2000 but the bill that contained it was vetoed.
Last month, the U.S. Treasury Department moved toward refunding three years of the taxes on long-distance calls, which prompted Grassley to suggest legislation to scrap the entire tax, including on local calls.
Grassley says “It does away with a temporary tax and because seniors tend to be more dependent upon telephones than other people, it’s going to be a financial help to seniors by eliminating this tax that’s no longer justified.”