[Congressional Record Volume 146, Number 67 (Thursday, May 25, 2000)]
[House]
[Pages H3864-H3865]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               HOUSE VOTES TO REPEAL TELEPHONE EXCISE TAX

  (Mr. TAUZIN asked and was given permission to address the House for 1 
minute.)
  Mr. TAUZIN. Mr. Speaker, I am very pleased that today while I was 
conducting a hearing in the House Committee on Commerce on broad band 
legislation, that the House is moving to pass an important piece of 
legislation to help the Internet community and all telephone consumers 
of America. That was a bill to repeal the 3 percent telephone tax that 
has been on the books as we know on and off since the Spanish American 
war. The telephone tax operates as a tax on the Internet because much 
of the Internet service flows over the telephone. As a result, this 3 
percent tax collected originally to fund the Spanish American War and 
left on the books for lo these many years had to go.
  Today, the House joined in large numbers in repealing that tax. I 
want to congratulate the House in making that great decision today. In 
fact, a study done by the Progress and Freedom Foundation indicates 
that over the last 12 years, telephone taxes have gone up in this 
country 62 percent, that telephone taxes, that taxes on the business of 
talking to one another in this country have risen a remarkable 62 
percent. That includes State, local and, of course, Federal taxes. When 
the combination of all these taxes mount up on a person's telephone 
bill, it means in effect that more and more people cannot afford to be 
on the Internet.
  In fact, the Progress and Freedom Foundation estimates that well over 
20 percent of America will not access the Internet because of the high 
level of telephone taxation. Now, what is ironic about that is that we 
live in a country that prides itself on free speech. In fact, the first 
amendment to our Constitution is an amendment that protects American's 
right to free speech, in effect protects our right to free speech 
against the Government infringing upon it.
  I want you to think about that for a second. In this wonderful free 
speech society that prides itself and in fact brags about free speech 
around the world, we in America tax speech in many jurisdictions of our 
country more than we do tobacco. In other words, the taxes on 
telephones in many jurisdictions of America are higher than the taxes 
on tobacco, which is supposed to be a sin product. Speech is supposed 
to be honored and respected in America. In this great House we honor 
and respect the right of free speech in our wonderful debates on the 
great issues of the day.
  Yet our government taxes talking on a telephone so high that it 
amounts to more than the taxes on tobacco in many parts of America. You 
would think we would honor speech by getting rid of those taxes, 
lowering those taxes; and so this House began today that process. By 
eliminating the 3 percent excise tax on talking on telephones, we 
hopefully have begun the process to honor and respect free speech again 
in our society. Eliminating this tax is going to save millions of 
Americans many millions of dollars over the years that unfortunately 
has been taken from them as they use their telephones or connect to the 
Internet.
  More importantly, as we repeal this 3 percent telephone tax, we will 
be making access to the Internet more affordable for many people in 
this country. Think about telephone taxes another way. It is one of the 
most regressive forms of taxation you can possibly

[[Page H3865]]

imagine, because we all use the telephone. We use it to keep in touch 
with our loved ones; we use it constantly in our businesses. Everyone 
uses the telephone. And in a real sense, when you talk about taxes 
being progressive or regressive, this is the most regressive tax that I 
can possibly imagine. Everybody pays it. The poorest of Americans who 
use the telephone pay a higher percentage of taxes with telephone taxes 
than they do in any other form.
  So this House really has done America a great favor. I am proud tell 
you that it was in 1998 that the gentlewoman from Washington (Ms. Dunn) 
and I filed the first bill to repeal the Spanish American 3 percent 
telephone tax. It has taken a few years, but this House today agreed 
with us. We are delighted in fact that the House has now sent to the 
Senate a bill to end this 100-year-old Spanish American War tax. I want 
you to know the Spanish can breathe easy tonight. The war is over. We 
have ended collecting a tax that ran that war. We should be very proud 
in fact that we are finally taking the right path in making both 
telephone and Internet service more affordable for people and getting 
rid of some of this heavy burden of excessive and regressive taxation 
on the folks in America who use the telephone.
  We have only just begun. As we go through the process of trying to 
make sure that the Internet is free and accessible for more and more 
people, free of these heavy taxation burdens, our committee and the 
Committee on Ways and Means will continue to see whether or not we can 
hopefully give Americans even more relief from taxation. In that 
regard, Mr. Speaker, our efforts will continue. We are going to look 
seriously at possibly putting some kind of limitation on the FCC's 
ability to constantly raise taxes', and one day just hopefully one day 
we will honor and respect free speech in America the way our 
forefathers intended.

                          ____________________