Americans for Tax Reform sent a letter to both chambers of the Tennessee legislature today urging them to support House Bill 574 and Senate Bill 598. The bills, designed to reform costly and antiquated telephone regulations, are eerily reminiscent of a redistribution of wealth scheme. While the economy is still trying to recover from the Great Recession the last thing we need is unnecessary and discriminatory taxes. In the letter ATR President Grover Norquist stated:

“House Bill 574 and Senate Bill 598 would end these costly and burdensome regulations, saving consumers and businesses millions of dollars a year, while shrinking the size and influence of state government.”

The following is the letter in its entirety.

February 17, 2011

Tennessee General Assembly

RE:  Support House Bill 574/Senate Bill 598

Dear Members of the General Assembly,

I write urging you to pass House Bill 574/Senate Bill 598 to reform costly and antiquated telephone regulations.

Tennessee’s phone regulations are mired in a redistribution of wealth scheme.  Under regulations known as access charges, consumers and companies are forced to heavily subsidize a select few phone companies just to be able to connect a call.  These access charges have the exact same economic effect as a tax; amounting to a government-mandated taking from some consumers to others.

House Bill 574 and Senate Bill 598 would end these costly and burdensome regulations, saving consumers and businesses millions of dollars a year, while shrinking the size and influence of state government.

Dating back to the 1980s, these antiquated regulations also stifle innovation. With a government-guaranteed stream of revenue, subsidized companies have little incentive to improve their services for customers or undertake efficient business practices.

Unlike actions taken by other states, this legislation would eliminate these costly regulations without slapping a new tax on consumers to continue providing corporate welfare.  In this light, House Bill 1276 should be rejected as it perpetuates the status quo by passing the buck to the Tennessee Regulatory Authority, who will undoubtably maintain existing subsidy programs.  Instead, HB 574/SB 598 would phase out these regulations over the course of four years, during which time previously subsidized companies can adapt to the free market.

For these reasons, I urge you to end this corporate welfare by passing House Bill 574/Senate Bill 598.  During this economic downturn, eliminating burdensome regulations should be the first priority of lawmakers looking to put more money in consumers’ pockets and scale back the control of government.

Sincerely,

Grover Norquist

President

Americans for Tax Reform