Vetoing yet another tax cut, Clinton protects tax imposed in 1898 to fight the Spaniards

WASHINGTON-  Citing President Clinton's veto of a bill to repeal the 102-year old federal excise tax on telecommunications, Americans for Tax Reform (ATR) today roundly criticized the Clinton-Gore Administration for protecting an outdated tax that widens the digital divide and is putting high-speed Internet access out of reach for over 100,000 Americans.

  "Here we go again," said Ron Nehring, director of national campaigns for ATR.  "Another tax cut vetoed by the Clinton-Gore White House.  The President's veto will cost Americans over $4 billion next year, the bill to collect a tax first imposed to fund the Spanish-American War in 1898." 

 "The retaliatory veto was of a $33 billion measure that included funding for the legislative branch, the White House, and the Treasury Department and a Republican-sought repeal of the 3 percent federal excise tax on telephone service," said Grover Norquist, president of ATR.

 "The federal excise tax on telecommunications is a flat 3% surcharge on Americans' phone bills," Norquist added.  "The tax was first imposed as a 'luxury tax' at a time when there were barely 2000 phone lines in operation across America.  Now, with 99% of Americans with telephone service, the tax constitutes another broad-based tax Americans barely know exists because it's buried in telephone bills."

 Earlier this year, the federal Advisory Commission on Electronic Commerce recommended repealing the tax outright.  A study commissioned by the Progress and Freedom Foundation found that the tax prices high speed Internet access out of the market for 140,000 low and moderate income Americans.

 The effort to repeal the tax met with little resistance in Congress.  420 House members and 97 Senators voted in favor of the measure.