Americans to get five-year wireless tax freeze
New Yorkers already paying more than UK
The US House of Representatives has imposed a five-year freeze on new wireless taxes, forbidding states or municipal authorities from imposing any new taxes until 2016.
The average American pays 16.3 per cent tax on wireless services, compared to 7.4 per cent on other products, according to the legislation's sponsor Zoe Lofgren*. The new bill won't cut those rates, but it should stop them going up as it prevents local and state authorities imposing any new tax which only affects wireless services.
So wireless users in New York will continue to pay 20.4 per cent tax on their wireless, while residents of Baltimore have to shell out 26.8 per cent, which makes the UK VAT rate of 20 per cent (charged on almost everything we buy, even wireless) look reasonable.
The Washington Post quotes the bill's co-sponsor Trent Franks**: "The exorbitant discriminatory taxes on wireless customers are not only unfair, they are counterintuitive, adding another costly impediment to the success of so many American businesses who are struggling in the midst of a prolonged recession."
The mobile industry lobbying body, CTIA, was unrestrained in its praise of the bill: "On behalf of the 300 million wireless customers in the US, CTIA applauds the Wireless Tax Fairness Act’s lead sponsors", pausing only to hope that the Senate pushes its version of the bill through quickly. ®
* US Representative for California (Democrat) – Rep D-Calif, in American parlance
** US Representative for Arizona (Republican) – Rep R-Ariz, as above
And that auction crippled the UK telecoms industry. Within a couple of years 10s of thousands of telecoms jobs were lost. Some of the "winning" companies still haven't fully recovered a decade later.
"The US House of Representatives has imposed a five-year freeze on new wireless taxes"...
The House of Representatives cannot impose a freeze on taxes, or any other legislation on their own. What the article should say is that the House of Representatives has approved legislation to freeze taxes, and the bill will now be sent to the Senate for approval. Following Senate approval, and negotiations to resolve any differences in their respective legislation, the bill will be sent to President Obama for his signature or veto. Only after both houses of Congress pass a bill, AND the President signs it, does it become law.
Unfortunately, the two house of Congress are passing very little legislation these days... they're to busy playing "one upsmanship" with each other and the two parties (Republican and Democrat) to pass much in the way of legislation that doesn't meet their partisan standards... Fire 'em all, and bring in Congress critters who will do the job they're getting paid to do.
FAIL, because the US Congress is a total and abject failure right now. Or maybe I should go with a "joke alert" or thermonuclear explosion.
VAT is only part of the government take
"... which makes the UK VAT rate of 20 per cent ... look reasonable."
As well as VAT on sales, the British government raised over £22 billion from the auction of the 3G spectrum. This additional component of revenue is far from negligible.