Majority of House of Representatives signs on to end 108-year-old tax on talking
WASHINGTON – H.R. 1898, which would repeal the 3% federal excise tax on telecommunications, a 108-year-old “temporary” tax enacted to fund the Spanish-American War, gained its 218th cosponsor this week. A majority of the House is now cosponsoring the legislation.
While the Spanish-American War tax was originally billed as a luxury tax in 1898, when only the wealthiest Americans had phones, the telephone is now a ubiquitous part of American life. The tax is therefore highly regressive, as it represents a greater share of the income of low-income and minority households.
In 2000, the House of Representatives passed legislation repealing the Spanish-American War tax by a vote of 420-2, and both houses of Congress passed appropriations legislation including the repeal in the same year. President Bill Clinton, however, vetoed the legislation.
“This is a real benchmark in the battle to finally end this tax,” said taxpayer advocate Grover Norquist. “Now a majority of the House would not only vote to repeal the tax, but have proactively signed on as cosponsors. Repealing the Spanish-American War tax this year would be a real feather in the cap of the 109th Congress.”
The Senate companion to H.R. 1898, S. 1321, sponsored by Sen. Rick Santorum (R-PA), has been reported favorably by the Finance Committee and awaits a full Senate vote. However, the Constitution requires that the House pass tax legislation before the Senate may act.