^{Democracy & Technology Blog} Bye bye, phone tax?

Could changing technologies and evolving voice telephony service plans effectively doom the century-old telephone excise tax before politicians ever get around to it? Blogger Jim Glass has been following the story and notes a new class action law suit that we’d actually support. The suit targets the IRS for illegally collecting some $9 billion or more in taxes that don’t meet its own definition under the phone excise law, which was enacted in 1898 to support the Spanish-American War. IRS regulations say the tax applies to calls measured in “time and distance,” but from mobile phones to VoIP, many of today’s calls aren’t measured by time or distance, and often neither. The IRS has already lost all 10 relevant court cases but doesn’t want to give up the teletax. Lots more on the IRS’s losing battle and some good studies on the regressive and inefficient tax here, here, and here.
Hat tip: Don Luskin.
-Bret Swanson