One for You, 19 For Me

January 05, 2006

Your Money HE'S THE TAX MAN...and boy does he love cell phones.

Last year cell phone subscribers paid a whopping $17.8 billion in federal, state and local taxes according to The New York Times. Those taxes increased nine times faster than the taxes on other goods and services between January 2003 and April 2004 according to Forbes magazine.

USA Today claims many states and local governments consider new cell phone taxes necessary because the number of standard wired phone lines that have dropped nationwide. The article cites statistics from the Federal Communications Commission (FCC) that say the number of wired phone lines in the U.S. dropped from 167 million in 2000 to 132 million in 2004.

To combat this alarming trend the Cellular Telecommunications and Internet Association (CTIA) is fighting back with a big public relations blitz and the launch of a new web site called StopAddingtoMyBill.com.

The new web site aims to educate consumers and government officials. For example, it explains that fees and surcharges consumers pay for using a cell phone are nearly twice as high as those paid when buying taxable items at a local hardware store. New York, Florida, Washington, Illinois, and Nebraska are the worst offenders, adding more than 20% to the typical monthly cellular telephone bill.

“The local governments are singling out wireless subscribers because there are a lot of them,” said John Walls recently. He is the CTIA vice president for public relations. “This is arbitrary and discriminatory. It is a grossly unfair burden on consumers. They are putting the brakes on a significant driver (of) the economy.”

And how. ■

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