Since cell phones move, tax them
It appears that average wireless service nationwide have reached new highs rising above 16% as politicians look for something to maintain state and local coffers in a down economy. This is more than twice as high as the average rate of other consumption taxes and states like Nebraska, Washington, and New York top the list at around 23%. A proposed moratorium on new wireless taxes H.R 1521 was proposed in the last congress but have unfortunately failed to pass.
The tax revenues do pay for the services that all of us use, but it’s the disparity between the tax rates for different products and services that is a serious concern. Furthermore, it is a regressive tax that benefits well off rural Americans to the tune of $4 billion while lower income Americans get less than a $1 billion dollars in Universal Service Fund (USF) subsidies. As a matter of public policy, it seems like we want to promote the adoption of more wireless services including voice and data by keeping the taxes reasonable rather than taxing them like sins.
Since this appears to be a widespread problem, perhaps there needs to be some creative solutions. If a city or state taxes wireless services as sins, they are sending the signal that they don’t want these services to thrive. If that’s the case, then one could conclude that these cities and states with high wireless taxes must not need USF money to help expand wireless services.
Your USF argument is getting stale. The DOT pays for roads to rural America, which also cost several times more than in the inner cities. In fact, I think the suburbs consume more resources than inner cities as well. The point is that we need to be able to communicate with rural Americans as well as we need to be able to get roads to them so that they can pull their products from what ever rural location they belong. Stop bashing rural America just because it costs a lot to maintain. It also provides food, lumber, and other resources that are needed for us to survive.
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@Michael Baumli
I think you’re missing my point. This isn’t about whether we fund rural or not, and that’s something that is fought out in the Congress and Senate. The point is that consumption taxes are not the best way to fund these projects because they punish specific industries and the taxes are regressive in nature.
Furthermore, the taxes are mostly paid at the local and state level which discourages adoption which in turn discourages more deployment.
Much like the idea of going with only a sales tax has a negative effect on the economy. People don’t want to buy as much because they are taxed.
The point is that federal subsidies for rural network build-out are being drained by local taxes that have nothing to do with rural network build-out.
Lastly, I never argued in the past that rural areas don’t need help getting developed, and I have no problem spending more money to build reasonable infrastructure for rural areas.
What I’m argued against is the excesses where the money going to the rural areas get pocketed by the wealthy home/farm owners as dividends for their co-ops that exceed their telephone service fees. What I argued against is $17K per year for a single phone line when much cheaper options are available. What I oppose is gold plated build out for rural areas that are blatant examples of abuse.
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