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Call for Scrapping Mobile Phone 'Vice' Tax

The CTIA President and CEO Steve Largent used the impending tax-filing deadline to reiterate the wireless industry's support for repealing the antiquated Federal Excise Tax (FET).

The tax, first instituted in 1898 to finance the Spanish-American War, adds 3 percent to the monthly bill of every wireline and wireless user in America. Today, there are more than 212 million wireless subscribers in the nation.

"Today's wireless user is buried under a heap of taxes and fees," said Largent. "The average wireless subscriber in America pays more than 17 percent (wireline is more than 20 percent) of his or her monthly bill in taxes and fees. That's nothing short of outrageous."

The Federal Excise Tax has been the target of numerous legal challenges over the past several years, and no fewer than three U.S. Circuit Courts of Appeals have found the levy to be illegal. A report in today's Wall Street Journal suggests that federal government officials have decided to abandon their defense of the beleaguered tax and may be entertaining a tax-payer refund.

"If the government has in fact decided to abandon their defense of the FET and is moving toward a full repeal and tax-payer refund, I congratulate and applaud their decision," continued Largent. "This would represent a significant and much needed tax cut for wireless users in America, and I encourage the federal government to move quickly in this direction."

BTW, did you know that all telecom services are taxed at such a high rate in the U.S. that it's similar to taxation on alcohol and tobacco products? Apparently, the various federal, state and local government entities that inflict these combined taxes and fees on consumers consider the act of 'making a phone call' to be a vice.

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