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October 11 2014

Wireless Usage Is No Sin

Carrie L. Lukas

Gasoline, tobacco, alcohol… These are the types of products that we tend to assume are singled out by the government for special taxes.  This isn’t just a way for government to raise revenue (though it is certainly that), these products are singled out for special taxes because government believes that smoking and drinking alcohol are bad for people’s health, and that gasoline usage harms the environment.  That’s why these are often referred to as “sin” taxes:  And government taxes them to try to encourage people to "sin" less. 

There’s reason to be suspicious of “sin” taxes:  They don’t always work to discourage the behavior they’re intended to and can encourage people to substitute toward equally unappealing options (or encourage participation in a black market).  They weigh most heavily on those who can least afford them (eating up a larger share of lower-income household’s budgets) and fail to differentiate between truly harmful behaviors (nightly swilling of large quantities of vodka) and totally innocuous, even healthful, behavior (having a glass or two of wine with dinner). 

At least, though, there is some rationale behind them.  

Why, then, are wireless services also singled out for huge taxes and government fees? 

As the Tax Foundation reports, Americans pay an average of 17.05 percent in combined federal, state, and local tax and fees on wireless service. That’s more than twice the average sales tax rates for other goods.

Surely using wireless services is no sin.  In fact, as I’ve written before, while politicians may have once placed wireless technology in the “luxury” category, and therefore ripe for an extra tax, wireless users now use these services for critical aspects of their everyday lives:

Wireless technologies are not just about accessing entertainment, but are often critical work and learning tools, as well as communications devises.  In an industry survey, most wireless consumers reported seeing access to wireless technologies not only as critical to their everyday life (more than 80 percent consider it an essential service), but as important for increasingly their productivity at work (44 percent) and in school (17 percent).

Women typically may not fit the tech-junkie stereotype, but as I explained in a chapter in Lean Together, women are actually among the biggest winners from the spread of technology, since it has created new paradigms for blending work, home, and education.

Americans should take note of the big chunk taken by government when they next go to pay their wireless bill.  There is no reason politicians should be using wireless to squeeze more money out of people.  The federal and state governments ought to eliminate this onerous, unnecessary tax.    

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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