Federal Telephone Excise Tax

FEDERAL TELEPHONE EXCISE TAX

Mr. FITZPATRICK of Pennsylvania. Mr. Speaker, I rise today to say good riddance to an outdated, antiquated tax that has long outlived its usefulness--the long distance telephone tax. This tax is known to many Americans only as another indiscernible line on their phone bill which reads as an access fee or charge for service.

But in fact, this tax began as part of the War Revenue Act of 1898 as a temporary means to finance the Spanish American War. Interestingly, this wasn't the only onerous tax in the War Revenue Act. The Act also gave us the much debated estate tax.

Back then, the excise tax was designed to be a luxury tax for people who owned telephones. Today, the war is ancient history and if you ask anyone walking down the street to join you in shouting ``Remember the Maine,'' I'd expect you to get quizzical stares. Today, there is no specific purpose for this tax. Telephones are a virtual necessity--not a luxury--and the revenues collected by this tax flow into the general fund. But this once temporary tax remains and costs American taxpayers, our small businesses and families almost $6 billion dollars a year.

On the tax, Gene Kimmelman, director of Consumers Union is quoted as saying, ``this is the poster child for how messed up our telephone pricing system is today. It makes no sense to have to pay a tax to fight a war that was over more than 100 years ago.'' Well today the tax has been repealed.

Americans will soon be able to file for a refund as part of their 2006 tax return for the past three years of charges and the Treasury Department estimates that $15 billion will be refunded to the American public.

I encourage all Americans to take advantage of this opportunity to get their returns and I call on my colleagues to set their sights on ending this tax's equally unnecessary counterpart, the local telephone excise tax. These are outdated, out-of-touch taxes and they should all be removed from the tax code.

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