Refund of Long-Distance Telephone Taxes

pertelote writes "Over 108 years after financing the Spanish American War, the tax on long-distance phone calls is finally being repealed. The IRS is supposed to refund our last three years worth of taxes for both landlines and cell phones on our returns next year. The phone companies sued because they did not want the hassle of collecting the tax. The tax is no longer in effect on 31 July, 2006." Don't get too excited about a big windfall. From the article: "Consumers, who pay about 40 percent of the taxes collected, typically pay about $18 a year in excise taxes if they have a long-distance service and a cellphone. They will be able to file for a refund on their 2006 federal income tax returns."

Comments

If it were private industry

[Tweekster]

This would be a clear cut case of fraud. Since the tax was imposed for a specific reason and obviously has not been used for that in the last 100 years or so, someone should go after the Federal Govt for fraud. Now that would be interesting.

It isnt that far fetched either, say your local community imposed an extra $20 on property taxes to be used for technology in schools and in reality it was used to buy a new Benz as a "govt vehicle" for the mayor, there would be significant problems.

The Nature of Taxes

[geoffrobinson]

The only reason this is getting appealed is because it was originally for the Spanish American War (Remember the Maine!). It was a humourous enough example to get someone in Congress to actually repeal this tax.

Generally, taxes never die. So be very cautious about adding a new one.

Pennsylvania still has the "Jonestown Flood Tax". A 18% excise tax on alcohol meant to raise funds for the flood that occured in 1889 or something like that.