American Group Protests at Cellular Taxes

As Tax Day looms in the USA, the Cellular Telecommunications & Internet Association (CTIA) has examined the hidden taxes consumers pay as part of their wireless phone bills, and named the ten states where wireless taxes are worst. "Incredibly, hidden taxes are about the same as the annual price reductions consumers have enjoyed as a result of wireless competition," said Tom Wheeler, President and CEO of CTIA. "Over the last four years, the cost to consumers of wireless phone use has fallen 32%, about 8% a year. Yet, nationwide, wireless taxes add nearly 12% to the average consumer's monthly bill."

While states and localities throughout the nation are hopping on the hidden tax bandwagon, the federal government isn't far behind. Currently, under consideration is a doubling of the amount every wireless phone subscriber pays to subsidize rural telephone companies (with the effect of blocking new competitors). "Something is wrong when good old American competition decreases prices for consumers, which governments then use as a smokescreen to cover increases in hidden taxes," added Wheeler. "When prices go down, consumers' bills should go down, too, without the savings being hijacked by hidden taxes."

Consumers aren't happy about the taxes, either. According to the telecoms regulator's fourth quarter 2001 report, questions about billing and rates, which includes inquiries about taxes, surcharges and fees, accounted for 71% of consumer inquiries (2,718 of the 3,823 inquiries).

CTIA's Top Ten List of Highest Wireless Taxes, by State: California (19.6%); Florida (17.8%); Virginia (17.1%); New York (16.4%) Nebraska ( 15.1%); Texas (14.9%); Illinois (13.0%); Tennessee (12.6%); Mississippi (12.0%); Pennsylvania (11.8%).'"

Posted to the site on 16th April 2002