Thursday, August 04, 2005

The Government Never Met A Tax It Didn't Like, vol. #396

The Congress passed a law in 1898 imposing a 3% on every telephone in the country. At the time there were only 1,300 phones in the U.S., and only a wealthy few could afford phone service, so the levy was considered a luxury tax.

It was aimed at offsetting the cost of the $250 million war against Spain, and in the words of the Revenue to Meet War Expenditures Act, would "be naturally repealed or modified when the [necessities] of war and the payment of war expenses have ceased."

Yet more than a century later, the tax remains in effect, bringing in at least $3 billion a year.

In 2000, the House of Representatives passed legislation repealing the Spanish-American War tax by a vote of 420-2, and both houses of Congress passed appropriations legislation including the repeal in the same year. President Bill Clinton, however, vetoed the legislation. Thanks, Bill.

- NewsMax