Date: 2011-11-01
Speaker: ZOE LOFGREN (democrat)
Chamber: H
State: California

I thank the gentlelady for yielding and thank the gentleman from Arizona for his kind comments. Mr. Speaker. I have introduced the Wireless Tax Fairness Act for three successive Congresses. and I am gratified that it is being considered by the full House here today. Nearly everyone agrees that expanding broadband Internet access and adoption is critical to the economic future of our country. As the FCC put it in the National Broadband Plan. the U.S. must lead the world in broadband innovation and investment and take all appropriate steps to ensure that Americans have access to modern highperformance broadband and the benefits it enables. I introduced the Wireless Tax Fairness Act because discriminatory taxes on wireless services are not consistent with this top national priority. Cell phone bills are on average taxed at a far higher rate than other goods and services. In many jurisdictions. the taxation of wireless approaches or even exceeds the rates of socalled sin taxes on goods like alcohol and tobacco. These disproportionate taxes discourage investment and adoption of wireless services. including advanced wireless broadband. Before he was the Presidents chief economist. Austan Goolsbee. published a peerreviewed study finding deadweight losses to society of up to $5 for every $1 in taxes on broadband service. including wireless. Now. these taxes fall particularly hard on workingclass and lowerincome Americans who are most likely to rely on their cell phone for all of their communications. including access to the Internet. And in fact. the Pew study and the CDC have indicated that usage of cell phones for Internet access among Latinos and African Americans in the United States was far higher than that among other Americans. And so. this regressive tax burden troubles me. especially in these economic times. Now. for 14 years before I was a Member of Congress. I served on the board of supervisors of Santa Clara County. So I really do understand the need of local governments to balance their budgets every year and to get revenue. But this bill would not affect any existing revenues. In fact. it wouldnt prevent raising taxes on all goods. If youre going to have a halfcent sales tax on everything. include wireless. What this would do is prevent you from singling out wireless services for disproportionate taxation. Ultimately. the moratorium for 5 years should yield to modernization of State and local telecommunication taxes. Separate higher taxes on wireless services are an outdated legacy of the days when telephone service was a regulated monopoly. A timeout from discriminatory tax increases will encourage States and localities to focus on enacting reforms that work for all stakeholders. In general. I do believe that State and local governments should have the autonomy to set tax rates as they see fit. And. in fact. during the committee markup we added an amendment that allows voterapproved discriminatory taxes if thats what the voters of a jurisdiction wish to do. But beyond that there are exceptions when Congress recognizes the need to protect in advance a national imperative. And thats one of these instances. As the national broadband plan said. wireless broadband is poised to become a key platform for innovation in the United States over the next decade. We should not let discriminatory taxes on wireless service disrupt this potential. Several years ago. we adopted a prohibition on discriminatory taxes on Internet access. At the time. I dont think we fully realized that wireless was going to be the onramp for so many of our citizens to the Internet. And so we did not include it at that time. This is to correct that omission. I thank the gentleman from Arizona for working with me and all of the 236 cosponsors who are part of this effort.