Government Realizes War Is Over
Written by Brian Garst, Posted in Taxes
No, not the war against Global Jihad, but the Spanish-American War. An 1898 “temporary” tax has finally been eliminated (almost).
After a long legal battle and strong urging from Congress, the Internal Revenue Service and the Department of the Treasury decided in May to discontinue the federal 3 percent excise tax on long-distance telephone service effective Aug. 1.
It also decided not to apply the tax to wireless, voice over Internet Protocol service, prepaid telephone cards and other bundled services. The IRS also said it would allow taxpayers to claim a refund in 2007 for taxes collected on those services retroactive to February 2003.
The last portion of the tax, pertaining only to local telephone service, remains in effect. But Verizon and other telecom companies are urging Congress to repeal the tax in total this year.
Nothing involving government is ever temporary, especially taxes. Once they establish a revenue stream, they won’t easily cut it off.
I serve as Vice President of the Center for Freedom and Prosperity, a non-profit think tank dedicated to preserving tax competition and free markets. This site features my personal views, which are not reflective of CF&P.