The Case for Lower Wireless Taxes
Monday, December 18th, 2006 By Marc KilmerCNet News has a column from a few days ago by Matt Kibe of FreedomWorks regarding cell phone taxes. The column does such a good job of laying out the problems with high wireless taxes that I’ll post a few excerpts here. I urge you to check it out in its entirety.
The impact of cell phones on the national economy is dramatic. According to an independent study produced for CTIA-The Wireless Association, the international industry group for wireless telecommunications, the U.S. wireless industry contributes $92 billion annually to the U.S. gross domestic product and supports 3.6 million jobs. At the current rate of growth, it will become a larger sector of the economy than the automobile industry in five years. The report also projects that the affordability and flexibility of mobile phones will drive productivity gains generating more than $600 billion in additional GDP over the next decade.
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On average, nearly 17 percent of the typical wireless bill is made up of taxes, fees and surcharges. Who pays? You do. About two-thirds of that amount goes to state and local governments, while the rest goes to Uncle Sam. By comparison, the average tax rate for other goods and services is only about 7 percent.
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This high level of taxation imposes significant costs on wireless subscribers and the economy as a whole. High taxes divert money that would instead go to capital investment and research and development of new technologies to drive future economic growth.
