arroba Email

Democracy & Technology Blog Voters reject discriminatory phone tax

Local officials think they’re so smart. In Corvallis, Oregon, for example, the city council approved a 5% tax on telecommunications services. The council said the money would be used to pay for equipment for the city’s fire department, including emergency vehicles. But in reality the additional revenue allows the city to fund less popular programs. Local officials everywhere cite the few worthy activities they perform to justify their tax proposals, knowing that new revenue will free up existing revenue that would otherwise have to be spent on the popular programs anyway. The officials can divert the existing money to the programs voters perceive as questionable, wasteful or of a lower priority. City officials apparently believe that the citizens who elect them are complete idiots.
Fortunately, Oregon allows citizen initiatives and referendums. A referendum to repeal the tax was filed, and the citizens of Corvallis voted for repeal by a 2 to 1 margin, proving that these local officials aren’t representing their constituents very well. And guess what, a member of the the city council confirms that the city will purchase necessary equipment for the fire department anyway.
Sadly, city officials throughout the country are trying to impose disciminatory taxes on telecommnuications to fund their clients the teachers and the social services, as described in a great paper from Americans for Tax Reform. But the good news is that telecom reform legislation in the Senate includes a provision by Senator John McCain (R-AZ) that would impose a 3 year moratorium.
See:Voters hang up on cell tax: City Council’s telecommunications tax gets slammed by voters,” by Kyle Odegard, Corvallis Gazette-Times, Sept. 20, 2006
See:State Tax Trends Over Twenty-Five Years: Tax Increases Down, Revenue Sources Shifting,” by Daniel Clifton and Elizabeth Karasmeighan, Americans for Tax Reform, Aug. 2006

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.