It's Time to End the Telephone Excise Tax

All Members
United States Senate
Washington, DC 20510
June 29, 2005
Dear Senator:

This week, Sen. Rick Santorum (R-PA) introduced S. 1321, which would amend the Internal Revenue Code of 1986 to repeal the federal excise tax on telephone and other communications services. The undersigned organizations strongly urge you to cosponsor and support S. 1321, and bring an end to an antiquated and highly regressive tax that has stifled telecommunications for more than a century.

The federal excise tax on telephones was first enacted in 1898 as a “temporary” tax for the purpose of funding the Spanish-American War. While the war lasted only four months, the tax is still with us, despite unsuccessful or short-lived efforts to repeal it. Congress has passed phaseouts of the tax on numerous occasions, only to reinstate the tax at a later time.

Since only a handful of the wealthiest Americans owned telephones in 1898, the tax was also billed as a “luxury tax.” However, in 2005 there are more telephones in America than people, and the tax represents the greatest share of the income of low-income and minority households.

Despite erroneous claims to the contrary, the federal excise tax does not fund any specific purpose, but instead goes into the general fund. In 2000, the House passed legislation repealing the tax by a vote of 420-2, and both houses of Congress passed appropriations legislation including the repeal in the same year, only to meet the veto pen of President Bill Clinton.

It is past time Congress repeal this antiquated, unfair and unpopular tax, and we strongly urge you to cosponsor and support S. 1321.

To cosponsor, please contact Melanie Looney in Sen. Rick Santorum’s office at 4-6324.

Sincerely,

Grover Norquist
Americans for Tax Reform

David Keene
American Conservative Union

Matt Kibbe
Freedom Works

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