October 12,2000

Roth Applauds Senate Vote to Repeal Telephone Tax

WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today applauded Senate approval of legislation that would repeal the telephone excise tax. The repeal was included as part of the Legislative Branch Appropriations Conference Report. The legislation now goes to the President for his signature. Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today released the following statement:

"Today we are one step closer to rolling back one of the most regressive taxes in history and give Americans everywhere a much-deserved break. Now all we need is the President's signature.

"For some time, now, I have pushed to repeal the Telephone Excise Tax, a tax that is placed on individuals and families, regardless of income or circumstance. Quite simply, if you owned a phone, you paid the tax, and along with its regressive nature, the tax was lamentable because it stood as one more example of how antiquated, unfair, counter-productive government policies not only outlive their original design, but become almost impossible to abolish.

"The Telephone Excise Tax was first imposed in 1898, more than 102 years ago. Its purpose was to fund the Spanish-American War, to provide for those who, like Teddy Roosevelt and his Rough Riders, needed the wherewithal to defend U.S. interests. At the time it was imposed, it came as something of a luxury tax -- a tax on the wealthy, as few Americans owned telephones.

"Well, Roosevelt rode up San Juan Hill. The war came to a end. But Washington couldn't resist holding on to the revenue. From time to time, the tax was repealed, but it always seemed to get reinstated -- rising as high as 25 percent at one point -- and placing an unfair burden on millions.

"Studies show that individuals and families with income less than $10,000 spend almost 10 percent of their income on telephone bills. Individuals and families earning $50,000 spend two percent of their income for telephone service. Thus, with this vote, we have rolled back one of the most regressive taxes.

"Mr. President, I'm proud of this action, grateful to those who supported repealing this excise tax. What we've done is not only in the interest of Americans everywhere, but it is a clear demonstration that we are willing and able to appropriately address the need to reduce the excessive tax burden that has been placed on the back of America's middle class.

"My sincere hope is that this is the beginning of a long and successful trend. I urge the President to sign this bill."