Hang This Up

By eweek  |  Posted 2001-03-26 Print this article Print

Tech taxes never die.

In 1898, the feds imposed a 3 percent excise tax on telephone calls to help pay for the Spanish-American War. The war ended that same year, but the tax is still with us. It has been repealed and reinstated several times to bolster federal coffers during World Wars I and II, the Depression, Korea and Vietnam. After Vietnam, the tax was reduced from 10 percent to 3 percent to help reduce the federal deficit.

In typical D.C. style, this permanent excise tax was tacked onto the Act for Better Childcare of 1990. But none of the money goes to kids. The $5 billion to $8 billion per year all goes into the general fund.

Question: Why is this tax still on the books?


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