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Americans to get five-year wireless tax freeze

New Yorkers already paying more than UK

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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

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