After 102 years, Congress finally realized the Spanish-American War is over. The United States House of Representatives voted last month to abolish the 3% federal telephone tax. The tax was created in 1898 to pay the cost of the Spanish American War. The war only lasted a few of months, but the tax covered parts of three centuries.
The tax was referred to as a "luxury" tax in 1898 because less than 1,500 Americans owned a telephone. Originally, the tax was 1-cent a call. President Woodrow Wilson raised the tax to 5-cents per call in 1917. This was done to help fund World War I. Again, to help finance World War II, President Franklin Roosevelt made the tax a 20 percent flat rate.
Attempts have been made since 1959 to abolish this ludicrous tax. Yet every attempt was delayed by a "temporary" extension of the tax. Even last month, two career congressmen, whose service totals more than fifty years, voted to keep the tax. Congressmen Pete Stark of California and John Murtha of Pennsylvania apparently believe the telephone is a "luxury". The telephone tax makes the Spanish-American War the most expensive war in history for the American taxpayer.
The bill to abolish the telephone tax now heads to the United States Senate where Senator John Breaux of Louisiana is the prime sponsor. The Senate is likely to pass the bill by a wide margin. President Clinton has warned that Congress "shouldn't act too quickly" on this. Too quickly? Is 102 years a bit hasty for the federal government? President Clinton is a good politician-he will sign the bill to avoid an embarrassing veto override.
The telephone tax brings the federal government $5 billion per year. That's about 2% of the total federal revenues. In other words, it's miniscule in light of today's massive surplus.
The lesson for American taxpayers is this - once a tax is imposed by any level of government, it's almost never abolished. There is no such thing as a "temporary" tax. Government has an insatiable appetite for our hard-earned money. Even a petty tax such as the telephone levy that cost each taxpayer about $2-$3 per month is pratically impossible to abolish.
But, good news! The telephone tax is nearly gone. And if government will continue offering the American taxpayer relief, the outdated inheritance tax will be next!
