Antiquated Tax Law Gets Second Look

By Caron Carlson  |  Posted 2005-02-07

For years, telecommunications companies have been pressuring Congress to do away with the federal excise tax on telephone services, a levy imposed in 1898 to help finance the Spanish-American War.

But last week, the Joint Committee on Taxation proposed that rather than getting rid of the tax, Congress should expand it to cover a broader range of services, including potentially all voice and data communications.

While conceding that there "is no compelling policy argument for imposing taxes on communications services," the committee said that it raises a lot of money, approximately $5.8 billion in 2003.

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