“The Nearest Thing to Eternal Life We Will Ever See on This Earth is a Government Program.”

What do the Spanish American War, telephones, and my wallet all have in common?

In 1898, America's war chest was low on cash to fund the Spanish American War. Congress looked at the new technology of telephony and thought a small temporary tax on this newfangled thing would raise funds from the rich but today it effects everyone. As Ronald Reagan often said "the nearest thing to eternal life we will ever see on this earth is a government program."

House Majority Whip Roy Blunt points out that "The telephone excise tax has outlasted two world wars, the Great Depression, and the start of two new centuries, but the federal government continued to needlessly tax basic telephone services. The war lasted only 220 days, yet this tax on talking has finally expired after over 39,000 days." The war ended at a cost of $6 billion, but the excise tax lived on and Americans have shelled out $300 billion for the program.

U.S. Treasury Secretary John Snow announced Thursday that the IRS would issue refunds of excise taxes on long-distance service for the past three years. "Today is a good day for American taxpayers; it marks the beginning of the end of an outdated, antiquated tax that has survived a century beyond its original purpose and by now should have been ancient history."

Last fall Senator Allen introduced S. 758 which would prohibit the government from applying the federal excise tax on telecommunications to Internet access service and also joined as a co-sponsor to S.1321 that would eliminate the federal excise tax entirely. According to Senator Allen "This tax is contrary to the national goal of having an advanced, highly efficient, low cost communications network to serve the American people. I am glad to see that the Department of Treasury will no longer continue to burden the American tax payers with this out-dated, unnecessary strain on their wallets and I will continue to support the termination of the federal excise tax on all communications services."

Now we can say that talk is cheap and really mean it.

Technorati : George Allen, John Snow, Roy Blunt, Spanish American War, Telephone Excise Tax