Roth Statement on Legislative Branch Appropriations Conference Report
Applauds Repeal of Telephone Tax Calls For Additional Funding for IRS
WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) Wednesday said the Senate today can move one step closer to repeal of the phone tax by passage of the Legislative Branch Appropriations Conference Report. Roth also raised concerns that the legislation has inadequate funding for the Internal Revenue Service, and urged that additional funds be appropriated for the agency.
"Mr. President, with passage of the Legislative Branch Appropriations Conference Report, the Senate will move one step closer to rolling back one of the most regressive taxes in history and give Americans everywhere a much-deserved break.
"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 From time to time, the tax was repealed, but it always seemed to get reinstated -- rising as high as 25 percent at one point -- and placing an unfair burden on millions.
"Today, however, we can move one step closer to eliminating the Telephone Excise Tax, and this -- in my mind -- is cause for celebration. 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. Because of what we have done here today, these families -- and all families -- will benefit.
"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.
"Now, on another issue, Mr. President, I am concerned that the Legislative Branch Appropriations Conference Report -- while it contains good news for taxpayers -- does not meet the full funding needs of the Internal Revenue Service. As you know, two years ago in a major bipartisan initiative, Congress successfully passed the largest IRS reform and restructuring effort in history. That law has been effective in protecting taxpayers and giving the IRS the direction necessary to re-engineer its business practices, upgrade its computer systems, and provide taxpayers with better service.
"But in order to most effectively carry out Congress' mandate, and to fulfill its mission to collect and protect the Federal revenue, the IRS needs adequate funding.
"This appropriations conference report, unfortunately, provides hundreds of millions of dollars less than what the agency needs. And the absence of proper funding will cut directly into the improved conditions that Congress desires. Unless additional funding is provided, the Service may be unable to effectively perform its audit and collection functions. Without adequate funding, service functions will diminish. There will be a loss of telephone and walk-in service for taxpayers, a decrease in the level of toll-free service, and it will become more difficult for taxpayers to receive assistance.
"Mr. President, we must provide additional funds to the IRS in other appropriate bills before this Congress adjourns. Only by doing this can we ensure that the IRS has the resources it needs to meet the standards of service and accountability that Congress has required. Along with eight members of the Senate Finance Committee, I have signed a letter to members of the Appropriations Committee asking that funding be restored. And I intend to work with my colleagues toward this end."
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