Slashdot Mirror
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.
The Kruger Dunning explains most post on
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.
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
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.
Taxes are how we transfer wealth away from the wealthy and give entitlements to those deemed deserving.
That's a terrible definition, IMO. Practically a Baraknophobic strawman.
Taxes provide, via defense, infrastructure, public safety, public education, etc., the basis for a stable society. That stable society is the basis on which almost all survive, many prosper and a few become very wealthy. Tax law holds people to their end of this bargain.
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.