For Immediate Release
Wednesday, Jun 28, 2006

Washington D.C. – Today, U.S. Senator John McCain (R-AZ) delivered the following statement before the Committee on Commerce, Science & Transportation regarding an amendment he proposed with Senator Bill Nelson (D-FL) on the taxation of wireless communications to the Communications, Consumer's Choice, and Broadband Deployment Act of 2006:

We all recognize that telecommunications taxes – and especially cell phone taxes – are too high. That is why Senator Bill Nelson and I, along with Senators Stevens and Allen are introducing this amendment. Tax rates on wireless service increased nine times faster than the rate on other taxable goods and services from 2003 to 2005. And so consumers are left paying almost 17 percent of their monthly cell phone bills to the government for a service one survey shows is Americans’ most important consumer electronics device – what survey respondent called his “lifeline to everyone I know.” By contrast, the average tax rate for other goods and services is less than seven percent – not even half the amount paid on cell phone service.

Everyone agrees that there’s a problem. In fact, the National Conference of State Legislatures and the National Governors’ Association have issued policy positions calling for states to eliminate excessive and discriminatory taxes on communications services. State and local governments have been working with the telecommunications industry to find a solution to excessive taxes on wireless and other telecom services. But no agreements have been reached.

I’m offering this amendment to put a stop to new discriminatory taxes on cell phone services for a period of three years. My hope is that, during that period of time, state and local governments – in cooperation with industry – will find fairer ways to tax these services. In doing so, the parties must keep in mind that the telecommunications industry operates in a much more competitive environment than traditional phone companies have in the past, and that today’s telecom services should not be taxed as utilities so that communications companies can invest in broadband and faster and better communications networks.

In offering this amendment, I’m mindful of the revenue requirements of states and localities, and so the amendment does not eliminate currently existing discriminatory taxes. Nor does the amendment prohibit states and localities from imposing new taxes on wireless services that are not discriminate. The amendment simply puts a stop to the creation of new discriminatory taxes on mobile services. The amendment’s scope is limited, despite a recent Wall Street Journal editorial indicating that the States’ fiscal situation doesn’t call for new discriminatory taxes: “America’s governors must feel as if they've won their own state lotteries. Thanks to the snappy growth of the U.S. economy over the last three years, state treasuries are now overflowing with tax collections.”

I urge my colleagues to support this amendment.

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from: http://mccain.senate.gov/
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Woo Hoo!! I might be able to actually afford a plan now instead of pre-paid!