Telephone Excise Tax Repeal Act of 2005

Mr. Speaker, in 1898, the United States engaged in a brief military conflict with Spain. To pay for the three month skirmish, lawmakers enacted a luxury tax that would only tap money from the super wealthy. Today, that same luxury tax lives on, but instead of taxing only the rich, it hits the pocket books of almost all Americans, both rich and poor. The tax is the federal phone tax. A pesky three percent surcharge on all phone calls made in the United States. Today I am introducing a bill to ensure its days, like those of the Spanish empire before the 1898 war, are numbered.

H.R. 1898, the ``Telephone Excise Tax Repeal Act of 2005,'' will repeal the antiquated tax on telecommunication services.

While a ``luxury'' tax on telecommunication services might have made sense in 1898, there is no question that telecommunications services today are necessities, not luxuries.

Today, Americans depend daily on land line telephones, cell phones and dial-up internet services to communicate. However, we continue to take money from Americans by classifying these services as a ``luxury.'' Today, more than 100 million American households are paying for a tax on their telecommunications services.

The tax is not only applied to local services, but on specialty features including call waiting, caller ID, local toll charges, long- distance calls, wireless services and directory assistance. This tax burdens our communication abilities and is destructive to technological innovation. It must be repealed immediately.

Telephone tax revenues once used to pay for the Spanish-American War are deposited in the General Fund. Unlike the gas tax, which directs revenues to the Highway Trust Fund, no specific account exists to redirect money collected from the telephone ``luxury'' tax. Other items subject to a ``luxury'' tax include airplane tickets, beer and liquor, firearms and cigarettes. Obviously, a telephone is a necessity, and thus does not fit with this list of ``luxury'' items.

It is time to hang up on the telephone tax. I urge my colleagues to join me in supporting this important legislation to permanently repeal the federal telephone excise tax.