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Reason Foundation

The $37 Billion Telecom Tax Burden

Steven Titch
April 30, 2007, 10:24am

Cable TV, wireline and wireless phone calls on average are taxed at twice the rate of other goods and services, according to a research report released today by the Heartland Institute. The high tax rates on telecom services no doubt come as no surprise to anyone who has signed up for a $49.99 calling plan only to see it morph into a $56 to $65 bill come month's end. The report, Taxes and Fees on Communication Services, written by David Tuerck and Paul Bachman of the Beacon Hill Institute of Suffolk University; and financial analyst John Rutledge and myself, finds that nationally, the average rate of federal, state and local taxes, surcharges and fees on telecom amounts to 13.52 percent, more than two times the average sales tax of 6.5 percent Americans pay. That translates to an average telecom tax of $250 a year from every household, compared to $124 paid in retail sales taxes. All told, telecom taxes soak up $37 billion from the economy every year.


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