A House committee bill was recently passed that calls for a five-year freeze on tax hikes related to mobile devices. While the bill still has to move through Congress, if passed, it could mean phone owners will receive a much-needed break from tax increases.
Judiciary Committee Votes in Favor of Wireless Act
On Thursday, the House Judiciary Committee passed a vote in favor of sending the Wireless Tax Fairness Act to the full House of Representatives for a vote.
The bill calls for a five-year freeze on tax hikes, or the introduction of any new taxes and fees on mobile devices that have a service plan. This includes cellphones, smartphones and tablets.
Currently, consumers pay an average of about $92 a year in taxes as a part of their cell phone plan. This equals roughly 16.3 percent of their total bill and is the highest amount ever charged, according to public policy research organization, the Heartland Institute.
Customers have complained for some time that taxes are too high, prompting lawmakers to find a way to help save on cell phone costs.
Some Say Freeze Isn’t Good Enough
While many consumer advocates–and even the cell phone industry–support the wireless bill, some say the freeze that the bill enforces will not be good enough.
One reason is because the bill doesn’t completely freeze tax hikes. If state and local governments decide to raise taxes, they can. They would just be required to raise taxes on other taxable products and services sold, including apparel and home products.
Also, opponents complain the bill doesn’t properly address the fact that current tax rates vary widely by location and are too high as they are. They also are disappointed that the bill doesn’t address the federal “universal service fund” tax that gets applied to all cell phone bills and adds more than 5 percent to costs.
Since the bill is still circulating within the House, it’s uncertain whether it will become a law. But the overwhelming preliminary support from House members (161 Republicans and 75 Democrats) looks to be a good sign for supporters.
