[Congressional Record Volume 153, Number 33 (Tuesday, February 27, 2007)]
[Extensions of Remarks]
[Page E400]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         TELEPHONE FEDERAL EXCISE TAX REPEAL BILL INTRODUCTION

                                 ______
                                 

                            HON. JOHN LEWIS

                               of georgia

                    in the house of representatives

                       Tuesday, February 27, 2007

  Mr. JOHN LEWIS of Georgia. Madam Speaker, I rise today with my 
colleagues, Representative Jim Ramstad, Representative  Rick Boucher, 
and Representative  Gary Miller to introduce the Telephone Excise 
Repeal Act of 2007. Our bill will repeal this 107-year-old tax that is 
outdated and is only paid by Americans that cannot pay for expensive 
communications services.
  The telephone FET was introduced in 1898 as a ``luxury'' tax to fund 
the Spanish American War. While it may have made sense then, there is 
no question that telecommunication services today are necessities, not 
luxuries.
  Telephone tax revenues, first collected in 1898 to help finance the 
Spanish-American War, are deposited in the General Fund. Unlike other 
excise tax revenues, these revenues are not deposited into a specific 
account such as the Highway Trust Fund, which is made up of gas tax 
revenues. Additionally, other excise taxes serve the purpose of 
decreasing consumption of the taxed product; the FET serves no such 
purpose. A telephone is a necessity for every American, and thus does 
not fit with this list of ``luxury'' and other excise tax items.
  The FET is now regressive and disproportionately burdens low-income, 
rural and lifeline telephone subscribers who have only local telephone 
service. As more and more Americans buy bundled communication services, 
the projected tax revenue collected from the FET continues to decrease 
and only affect those with the least means to purchase more costly 
packages. CBO estimates that this tax will bring in $1.5 billion over 
the next 10 years.
  This tax is contrary to the national goal of having an advanced, 
highly efficient, and low cost communications network to serve the 
American people. Please help us hang up on the telephone tax by joining 
us on this legislation.

                          ____________________