Taxes On Cell Phones Hit All-Time High
adeelarshad82 writes "As a breakdown of the top ten states with the highest and lowest taxes shows, the wireless consumers in Nebraska, Washington, and New York pay more than 20 percent of their wireless bills in taxes and fees, mostly due to the proliferation of archaic or duplicated surcharges. Experts from KSE Partners spent five years monitoring the federal, state, and local taxes imposed on wireless consumers. According to their analysis, wireless taxes grew three times faster than the retail sales rate between 2007 and 2010. The reason behind this is that legislators and Congressmen are targeting the wireless industry for tax money to relieve the burden from more recession-starved industries. In fact, a few states even tax wireless consumers for non wireless-related projects; for instance, Utah funds its poison-control centers with a poison-control surcharge found on wireless bills, and in 2009 Wisconsin imposed a police and fire protection fee to subsidize local departments."
So wait, emergency services that need to spend extra money for equipment and procedures to locate mobile callers (instead of much simpler land-line callers) are completely unrelated to cell phones?
I think there's a persistent perception in certain areas that only the well off and perhaps the young use cell phones. This makes them easy targets for tax rises - the rich don't care, and the young don't vote. From a revenue perspective it's a no brainer.
There are some things the government does that you can't qactually tax.
Prisons, schools, libraries, and so on.
So you use a wider tax base to pay for them.
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discovered the benefits of a throwaway tracfone and haven't looked back...
all i want is a phone (don't even do SMS) and i am very happy...
recommend getting a double-minutes-life phone right off the bat...
can find 'em in a full box w/auto charger, hands-free set, and case for
$4.88 in the local dollar stores...
taxes? pppphhhht! negligible...
Or it could be that us in WA only have a sales tax. So it's not that we pay higher fees and we get screwed, it's the method by which WA collects it's taxes.
Here in CA, the wireless vendors have to charge sales tax on the full retail price of the phone you buy even if you actually pay less than that with a contract. For example, my Droid X retails for $569.99. I can get it for $149.99 with a 2 year contract and an online purchase discount. I will be charged $52.72 in sales tax, which is an effective sales tax rate of over 35%! It's quite the ripoff!
Coming from Canada I'm amazed at how low taxes in the United States are. I'd love to pay higher taxes and get a better society as a result. (Not that a better society is a given with higher taxes, but I do think higher taxes are necessary to support the functioning of a better society.) But this be the wrong way to do it. I'd love a simpler and more uniform tax code with lower corporate income tax with many fewer loopholes and higher personal income tax or sales tax (or GST or VAT or similar). The idea of special fees and taxes on specific goods and services seems counterproductive to me unless they attempt to make up for the social costs imposed by using those goods and services. Cell phones seem to be valuable and accessible to almost all people, and so cell phone specific fees seem like bad taxation to me, even though I would like higher taxes in general.
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Would you really call poison control from a land line?
Me: Hey, what's this in the large white bottle in my kitchen near my landline? [sniff, sniff] It smells lemony. I wonder if it's lemonade or lemon scented bleach? ::
...
:: moments later
Me: Hello, poison control? I just accidentally drank dishwashing liquid while trying to get the taste of the worst lemonade ever out of my mouth
I'm looking for a decent prepaid data option to just go wifi + prepaid + google voice and drop regular voice/data plans for good. Eying t-mobile's $1.49 unlimited data 24-hour day pass. I'm so rarely in a non-wifi environment (subway commute) it hardly makes sense to pay for a standard voice/data plan.
Obvious reason for being an Anonymous Coward.
Working for a big telecom (not in US), one quarter, they asked our team to introduce a Service Access Fee for those who used a particular service without an explicit plan for that service, it was 50 cents so no one cared much, Q1 revenue gained, few millions, just like that.
Next quarter they asked us to charge an additional 50 cents as Administrative fee for those that did have an explicit plan for that service.
We did, but we were laughing at the business request.
In fact, a few states even tax wireless consumers for non wireless-related projects
In Mexico, when you pay certain taxes (like the "tenencia", which is a tax you pay every year for owning a car), they give you the bill and in it there are certain "voluntary donations" to stuff like the Red Cross, the Firemen, the Children Hospital and the State University. Sure, they say it's "voluntary" but they actually include it in the bill they send you every year and removing it can sometimes be a huge hassle. Not to mention the dirty looks you get from the cashiers...
Rent a mailbox in Oregon (or other favorable state), charter a corporation, get a phone + plan in the corporation's name. As long as you're routinely on the home network (not siphoning their profits to competitors via roaming agreements), they won't care. Bundle other location-dependent services like vehicle registration and insurance. Contract with a local registered agent as the corporation's location. With care, it'll cost a lot less in taxes. It's beneficial if you want change, no matter which change you want, since it creates more burden on the tax system by removing support from it. With enough people removing themselves from high-tax jurisdictions, the low-tax jurisdictions will be forced to change or the high-tax ones will break under the strain. Either is a win, depending on what team you root for.
The Nebraska legislature is looking at possibly passing a bill that will drop the cell phone occupation tax all together. But, a lot of cities like Omaha are freaking out about losing out on that money. So they're putting up a fight to stop this bill from passing.
My most recent cell phone bill was $53.88. That's on a $40 package that includes 300 minutes and Tmobile's MyFave addon. That rounds out to about 26% in fees and extra charges. I dont have texting. I dont have data. I'd say it's a bit excessive. I paid for my phone outright, and im no longer under contract with them, so in theory the bill should be lower.
The only reason I could think that brings the cost up is that the bill is fixed each month. I cant go over 300mins or it just cuts me off. I can however talk to my MyFave contacts for as long as i want and use nights and weekend minutes starting at 9pm
Even by American standards. Unlimited voice+text+data plans go for a whopping $45 in the US.
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I worked for a carrier that charged $62.50 for a $45 package that includes talk text & web, so im not paying nearly as much as some people. It was a post-paid monthly service.
After seeing this thread i went and checked out AT&T's offering and it's on par with my carrier. They probably charge just as much too.
Why would the low tax locations be forced to change. They are laughing all the way to the bank. The high tax locations would be forced to change to avoid breaking. If that means a few parasites have to find honest jobs I'm good with that.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Whether it's a user fee, "sin tax", sales tax, ad infinitum....your government is especially adept at this one thing: getting your money in a fashion least likely to catch your attention enough to cause you to vote against them.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
The statement in the header is misleading. Yes Utah charges a surcharge to fund the Poison Control Centers (someone you call if you or your child have been potentially poisoned so they can tell you what to do before the ambulance arrives, such as drink milk or charcoal or vomit depending on the substance). But Utah charges this surcharge against all phone bills not just Wireless. This post phrases it as if Wireless is the only phone hit with the fee. Maybe some of you kids without Landlines don't think you are on the hook for the taxes that landline users pay but that's not the way it should be. Everyone should pay the fee that goes to support 911 and other emergency services like the poison control center. Wireless should be no exception to these very legitimate taxes.
Now on the other hand, if the fee is simply to go around the regular tax system and is being used for general services it's a bad tax.
Go prepaid. I Went from virgin to sprint, because I HAD to have an android. So of course 3 months later Virgin Mobile gets the same phone I got with sprint (the intercept) . Right now me and sprint aren't talking, and I'm not paying, still deciding if I'm going to go back to them or not. The only reason I would is because of my need to have the New 6G 5.4 inch Quad Core HTC PURECOCAINE ORGASM
The US has a different tax structure from many other countries; we depend heavily on individual and corporate income taxes for governmental revenue. There is NO national sales tax of any kind; sales taxes are purely state matters. Imagine if your local council were to have the authority to put up an additional 5% tax on all purchases.
Unlimited voice+text+data plans go for a whopping $45 in the US
With whom? And I do mean after-tax, after-fees.
Which is absurd. You not only pay twice as much as the US in income taxes, but then you pay more than twice as much in sales tax on EVERY thing you buy, plus all the other mountains of taxes they add on. Wouldn't you like to, I dunno, actually have some money left from your paycheck to buy something you want or to save for the future?
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." ~Thomas Jefferson
I have the $25/mo plan from Virgin Mobile, 300 talk minutes plus unlimited text and data. No contract and the only extra is the sales tax on $25. They do have an entry level Droid phone for $150 but its way beyond my needs for just the occasional phone call.
Only the State obtains its revenue by coercion. - Murray Rothbard
There are powerful interests behind many different taxes. Some are populist, some are protectionist, some are for other reasons. It's not always (or even usually) the most efficient system that wins out. There are a lot of outside influences that don't necessarily care how a system works; they want it to work to their own ends.
I wish there was a hipster tax.
I just wish all the people in favor of high taxes were the ones who actually have to pay those high taxes. Unfortunately it's always those who pay little or no taxes demanding others pay higher taxes to subsidize their lifestyle.
Note: Before anyone claims that I'm some rich person who doesn't want to pay taxes, I made a whopping $22,000 last year before taxes, I simply believe in wacky notions like personal responsibility and that one person shouldn't be forced to pay for another.
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." ~Thomas Jefferson
We seem to have better infrastructure, much better social security, healthcare and all the rest of that socialist stuff.
plus all the other mountains of taxes they add on
No, there's income tax (on income) and VAT (value added tax, on "added value", but for an individual that means purchases). Extra taxes on random stuff like in this article are rare, a more-or-less complete list of stuff attracting these taxes is: petrol, alcoholic drinks, tobacco, betting, vehicle purchase, insurance, flights, landfill, aggregates, and climate change (I'm not sure how that last one works).
VAT doesn't apply on normal food and various other things, and is charged at a lower rate on some things (non-vehicle fuel, i.e. gas for heating/cooking and electricity).
I just wish that all those who bitch about paying taxes would have to pay fees instead of taxes everytime they use anything public - be it walking on a public road for a couple of metres, farting outside their house or even using government issued currency for their financial transactions.
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
It's a highly wacky notion counter to a civilised society.
When did I say "no taxes"? Oh, that's right, I didn't. I selected assholes like you (I just realized from your sig, you're the same troll from a few posts up) who say "Make that group pay for everything while I pay nothing and reap all the reward". I'd save a fortune if I only had to pay for the services I use instead of also having to pay to support the leeches like yourself.
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." ~Thomas Jefferson
Wow, I didn't realize that forcing one person to work against their will for another persons benefit (also known as "slavery") was "civilized". And to think all these people cried when the South made blacks work for another persons benefit! I guess it's OK though as long as it's only white people who worked harder in life than you did being forced to work for your benefit, right?
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." ~Thomas Jefferson
My income tax rate is higher than the tax rate on my wireless bill. So what? An appropriate question is whether wireless customers pay more in taxes than landline customers. Neither the article nor the study even consider that obvious question.