Did you know that you are paying for the Spanish-American War? That’s right, every month on your phone bill, you are paying a tax that was specifically created to pay for the war that began and ended in 1898. That year, Congress imposed a so-called “temporary” tax of one cent per telephone call to help pay for our expenses in the war. By 1990, that once cent per call had increased to three percent of your phone bill.
Following eleven federal court losses, the IRS will no longer collect the tax on long distance calls, and they plan to refund these taxes that were paid over the past three years. However, they will continue to collect the tax on local telephone service. A move is now afoot in the U.S. Congress to repeal this “temporary” tax before it can be amended to apply to all telecommunications methods, including internet and other technologies that are not subject to the tax.
Ronald Reagan said that the closest thing to eternal life we’ll see on this earth is a government agency. That bit of hyperbole could also be applied to “temporary” taxes.