Wyden, Snowe Introduce Legislation to Help Grow Nation's Telecommunications Infrastructure
"Mobile Wireless Tax Fairness Act of 2008" would grant a five-year moratorium on new telecom taxes
WASHINGTON, DC - Working to help American telecommunications networks keep pace with rising international competition, U.S. Senators Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine) introduced legislation today that would enact a five year moratorium on new or increased taxes on wireless telecommunications infrastructure and services. Currently, telecommunications services are taxed at a rate that rivals - and in some places exceeds - taxes on tobacco and alcohol.
"Americans are being hit hard with rising costs for gas, health care, and food for the dinner table. Americans need to know that their cell phone bills won't be the next cost to spiral out of control," said Senator Wyden. "Keeping our telecom infrastructure cutting-edge keeps our economy moving and helps the millions of Americans and businesses who depend on affordable wireless services."
"These excessive and discriminatory taxes discourage wireless' adoption and use, primarily with low-income individuals and families that still view a cellular phone as a luxury when many Americans consider it a necessity," Senator Snowe said. "By banning these taxes, we can equalize the taxation of the wireless industry with that of other goods and services and protect the wireless consumer from the weight of fees, surcharges, and general business taxes."
While the average tax rate for goods and services is 7.07 percent, the typical consumer pays 15.9 percent of their total wireless bill in federal, state and local taxes. The effective rate of taxation on wireless services increased four times faster than the rate on other taxable goods and services between January 2003 and January 2007. Currently, the industry is in the midst of upgrading to the 4G network standard, which would provide the bandwidth necessary to offer true high speed access in rural areas.
Senator Wyden is a long-time advocate of the expansion of internet and telecommunications infrastructure development. Working with colleagues from both sides of the aisle, Wyden has four times protected Internet providers from content-related litigation. He has also fought to protect the Internet from being hit with multiple discriminatory taxes from thousands of state and local tax authorities - and has worked to extend that protection.