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Friday, May 26, 2000
House votes to ax old phone tax
Funds will be used to help bridge the 'digital divide'
By Curt Anderson
Associated Press
WASHINGTON - The House voted overwhelmingly Thursday to repeal a federal telephone tax originally passed to finance the Spanish-American War, when telephones were a newfangled luxury enjoyed by fewer than 1,500 wealthy households.
With the 3 percent telephone excise tax now affecting an estimated 252 million telephone lines - including those connected to cellular phones, fax machines and computer modems - Democrats and Republicans jockeying to be viewed as technology-friendly agreed it was time to use a portion of the projected budget surplus to scrap it.
"The Spanish-American War is history," said House Speaker Dennis Hastert, R-Ill. "The Spanish-American War tax ought to be history as well."
The House voted 420-2 to do away with the telephone tax in three equal steps, with full repeal coming Oct. 1, 2002. Reps. Fortney "Pete" Stark, D-Calif., and John Murtha, D-Pa., voted against the measure.
The bill, which would reduce government revenue by about $20 billion over five years, next moves to the Senate, where Sen. John Breaux, D-La., and other sponsors said they were encouraged by the strong House vote.
Although the Republican-led Congress has made tax cuts of all kinds a priority this election year, the phone tax repeal gained bipartisan popularity because it was seen as a modest way to overcome part of the "digital divide" that hinders lower-income people from gaining access to the Internet.
"It doesn't finance any war, but it could be an impediment in our battle to provide universal access to the Internet," said House Minority Leader Dick Gephardt, D-Mo.
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