Some in Concord want to raise taxes via the phone company

MAKING PHONE calls in New Hampshire will get more expensive if certain tax-raising politicians in Concord have their way. The federal government already taxes us on our income, the state taxes us on our property, and, when we spend some of what is left over to pay our phone bill, we are taxed again by both.

But this is not enough, say some representatives in the state capital. They want to allow local government to add another tax to telephone calls — this time, to the wooden telephone polls and the conduits that carry our conversations. Their plan is to shoot down House Bill 1416, which would allow this portion of a phone call to remain tax-free.

Opponents of this bill are resting their case on a phony argument that has long been favored by the tax-hiking crowd: The phone companies will pay for it. It is true that the phone companies will be writing the check to the government — but the consumers will provide the money that makes the check clear.

The magic show where politicians claim businesses can make money appear from nowhere used to be convincing. But today’s economically savvy voters will no longer be fooled by this sleight-of-hand pick-pocket scam that has too often left them wondering where their money has gone. Voters today know that, in the end, only people pay taxes.

Anti-consumer politicians argue that a rate increase would require Public Utilities Commission approval, making it more likely that the phone companies would “absorb the tax” rather than seek approval to increase prices. But even if the phone companies are not allowed to directly cover the cost increase by raising rates, the customers will still pay. The rate, the monetary cost, is only one of the costs telephone users pay. There are also the many non-monetary costs — such as waiting longer on hold to talk to a phone company representative, or waiting longer to get a new phone line installed, or talking to a machine instead of a person.

When the government does not let phone companies set prices at the market rate, the companies are forced to cut costs elsewhere, and cutting services — and employees — is usually their only option. If taxes are levied on the telephone poles, customers will either pay a higher rate or pay more with their precious time. The only people who will have more time will be the phone company workers who are laid off as a result of this government money grab.

In addition to being wrong about who will pay for the tax increase, those supporting raising taxes, such as Sen. Dick Green, are doing something funny with their numbers. In this paper Sen. Green claimed that, because this tax does not currently exist, it is “a cost of $30 million to $40 million annually.” But this is like arguing that the worker with $20,000 left in his pocket after paying taxes is costing the state $20,000 annually. Green goes on to make the offensive argument that this is a massive “subsidy.” Senator, we earn that money. You are not giving it to us as a subsidy.

The confusion continues when Sen. Green, admitting that phone users may have to pay more, argues that “any increase in telephone bills . . . would likely be a modest 50 cents per month.” But if the goal is to recoup the so-called “cost” of $30 million to $40 million from the 850,000 wire-line customers in New Hampshire, a simple calculation shows the actual number is between $35 and $47 more per customer per year, or about $3 to $4 per month.

It is time for the opponents of HB 1416 to make an honest case. Not only with the numbers they are using to convince the public to pay more taxes, but also with who will pay for it. And the only honest answer to who pays for it is everyone who uses a phone.

Max Pappas is a policy analyst with Citizens for a Sound Economy in Washington, D.C.