House Axes Phone Tax - Death Tax Next
Dateline: 05/26/00
The U.S. House of Representatives voted 420 - 2 yesterday to repeal a 102-year old federal excise tax on telephone and other communication services.
The phone tax, originally applied in 1898 to help pay for America's participation in the Spanish American War, has been repealed twice before but was reapplied in different forms to help pay for World Wars I and II and Vietnam. The tax was made permanent in 1990.
The bill passed today, H.R. 3916, would drop the 3 percent tax to 2 percent 30 days after the law is signed by the President. The tax would then fall to 1 percent on Oct. 1, 2001 and go away completely on Oct. 1, 2002. Legislative analysts estimate an average family will realize an annual savings of about $45 once the excise tax is completely removed.
The Clinton Administration has expressed misgivings about repealing the phone tax, but the action has overwhelming support in Congress.
The House is also scheduled to take up a bill that would, over ten years, repeal the controversial estate or "death" tax from the income tax code. The bill is sponsored by Republicans but has gained substantial support from Democratic Members of Congress, as well.
At close of business yesterday, the House adjourned for its Memorial Day work period and will not convene again until June 6, 2000.
Reference Links
Millions donated for fallen firefighters' families tied up in tax issue
CNN - May 16, 2000: Millions donated to fund for deceased firefighters may never reach their families due to the IRS estate tax laws.
A national organization dedicated to repeal of the estate tax.
"As with the income tax, the estate tax was first instituted as a temporary emergency measure designed to raise revenue during war time." From U.S. Rep. Christopher Cox.
Tax Reform Issues
Get the latest on these and other proposed changes to the tax laws from U.S. Politics Guide John Aravosis.
If Congress does not repeal the death tax, how to plan for it. Net resource compiled by Tax Planning Guide Shellie L. Moore.
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