Economist Scott Mackey’s analysis shows that the average U.S. wireless subscriber pays taxes and fees on a cell-phone bill totaling 16.3 percent, compared with 7.4 percent for taxes on other goods and services. Worst offender of these discriminatory taxes is Nebraska, where Mackey estimates state, local and federal cell-phone taxes total 23.7 percent — more than three times higher than the state’s average sales tax.
For a growing segment of consumers, particularly young and lower-income, cell phones are the sole means of keeping in touch with friends and family as well as contacting would-be employers, community services and 911.
High cell-phone taxes and fees discourage investments and jobs in high-tech services and infrastructure in order to prop up communications services and infrastructure that are increasingly in decline.
It’s time Nebraska phased out discriminatory taxes, as proposed in the Nebraska Municipal Telecommunications Service Occupation Tax Act (Legislative Bill 165).
Published in the Omaha World Herald on February 19, 2011, written by Steve Pociask, and available online.