Policymakers are always looking for something new to tax. And now they want to bump up taxes on cell phone use.
As Tax Bytes reported in February, a committee of the U.S. Congress is looking at imposing a 3 percent tax on data line and cell phone usage.The Joint Committee on Taxation seems to think that a telephone tax first passed to pay for the Spanish-American War in the late 19th century should apply to all forms of wired and wireless communication.
Fortunately, cooler heads on Capitol Hill are prevailing when it comes to taxing the Internet, with several moratoria passed on such taxes over the last 10 years. And a bill to make the Internet tax ban permanent has a good chance of passing.
But that doesn’t mean policymakers aren’t busily trying to devise new ways to feed their treasuries. USA Today reported earlier this month that every state imposes a tax on cell phone users. That’s in addition to the federal government’s 6.05 percent tax on these users.
But it isn’t stopping there. Oregon's lawmakers are debating a 5 percentage-point increase in their tax, while elected Missouri officials are looking at a 3 or 4 percentage-point increase.
Missouri would move into the top five states with the highest cell phone taxes, surpassed only by Washington, New York, Florida and Illinois. (See table)
| State | State tax | Federal Tax | total |
| Wash. | 16.21% | 6.05% | 22.26% |
| N.Y. | 16.16% | 6.05% | 22.21% |
| Fla. | 16.10% | 6.05% | 22.15% |
| Ill. | 15.52% | 6.05% | 21.57% |
| Neb. | 15.10% | 6.05% | 21.15% |
| Missouri* | 15.37%% | 6.05% | 21.42% |
| R.I. | 14.55% | 6.05% | 20.60% |
| Texas | 14.17% | 6.05% | 20.22% |
| Pa. | 13.52% | 6.05% | 19.57% |
| Calif. | 13.18% | 6.05% | 19.23% |
| Utah | 12.66% | 6.05% | 18.71% |
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* If the Missouri Legislature passes a 5 percent tax on cell phones.
Cities and states say they need to make up for falling revenue from landlines.
But what they really mean is that they, as politicians, want to keep giving citizens benefits and services in the hope of being re-elected. So they look for ways to take citizens’ money without much fanfare — who reads through all the items on a cell phone bill? — and then try to buy your vote with your money.
It’s time for the public to take a stand and say: Cell No, We Won’t Go!