[Congressional Record Volume 153, Number 33 (Tuesday, February 27, 2007)]
[Extensions of Remarks]
[Page E410]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 ON THE INTRODUCTION OF H.R. 1194, THE TELEPHONE EXCISE TAX REPEAL ACT 
                                OF 2007

                                 ______
                                 

                          HON. GARY G. MILLER

                             of california

                    in the house of representatives

                       Tuesday, February 27, 2007

  Mr. GARY G. MILLER of California. Madam Speaker, I rise today in 
strong support of the Telephone Excise Tax Repeal Act of 2007. As the 
sponsor of this legislation in previous sessions of Congress, I thank 
my colleagues in the majority and members of the Ways and Means 
Committee for recognizing the value of this important issue. Congress 
must continue to work together in a bipartisan fashion, building on 
momentum from last year's cosponsorship by 220 members, to abolish this 
tax. I am proud to join with my colleagues today to introduce the 
Telephone Excise Tax Repeal Act in the 110th Congress, which will 
eliminate the three percent tax on all telecommunications services.
  The federal excise tax on telecommunications services was used to pay 
for the Spanish-American War in 1898. This tax was intended to tap only 
the wealthiest 1,400 telephone owners. However, with more telephones 
than people in the United States today, this excise tax represents the 
polar opposite of a luxury tax, and merely serves to raise prices for 
consumers.
  Telephone tax revenues once used to pay for the Spanish-American War 
are deposited in the General Fund. Unlike the gas tax, which directs 
revenues to the Highway Trust Fund, no specific account exists to 
redirect money collected from the telephone ``luxury'' tax. Other items 
subject to a ``luxury'' tax include airplane tickets, beer and liquor, 
firearms and cigarettes. Obviously, a telephone is a necessity, and 
thus does not fit with this list of ``luxury'' items.
  Last year, the U.S. Treasury Department conceded the legal dispute 
over the federal excise tax on long-distance telephone service. After 
11 consecutive courtroom losses by the Internal Revenue Service (IRS), 
Treasury Secretary John Snow announced that collection of the three 
percent excise tax on long-distance and bundled services would end on 
July 31, 2006. In fact, the IRS is issuing refunds of tax on long-
distance service for the past 3 years. This year, taxpayers may apply 
for refunds on their 2006 tax forms. The Treasury's action is a step in 
the right direction, and it is finally time for Congress to put an end 
to this hidden tax on local telecommunication services.
  The telephone tax burdens our communication abilities and is 
destructive to technological innovation. It must be repealed 
immediately. I urge my colleagues to build upon the successes we have 
had in the past and to help American taxpayers win the war on their 
wallets once and for all.

                          ____________________