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Press Release


Hang Up on New Wireless Phone Tax Hike, Nation's Largest Taxpayer Group Urges LA House Members

For Immediate Release June 9, 2005

(Alexandria, VA) -- Louisiana's already-heavy state and local tax burden will only be a bigger drag on the state's residents and economy if politicians support a $30 million tax hike on wireless phone consumers now pending before the Legislature. That's the warning from the non-partisan National Taxpayers Union (NTU), which today urged lawmakers to abandon the proposal. NTU has 350,000 members nationwide and over 3,000 members in Louisiana.

"Unless Louisiana lawmakers stop their merciless scavenger-hunt for higher revenues, the Pelican State may soon become known as the Vulture State," said NTU President John Berthoud. "Punishing wireless phone customers for the mistakes of a fiscally-irresponsible government is politically unfair and economically unsound."

HB 688, which could be rushed to passage at any moment, would impose an additional 2 percent tax on all wireless phone services in Louisiana -- on top of existing telecommunications taxes, fees, and surcharges. This provision, while seemingly modest, would actually wallop Louisianans with a $30 million increase in taxes.

According to Berthoud, HB 688 is part of a "disturbing and underreported fiscal trend." Louisiana was once considered a "low-tax state," but the Legislature's recent tendency to tax and spend is reversing this reputation. Between 1970 and 1999, Louisiana's state and local tax burden was well below the national average. Today it is estimated to consume 10.4 percent of income. That ranks 16th-highest nationally and is well above the national average of 10.1 percent.

"Lawmakers and taxpayers alike should beware of any proposal that would add to the intolerable tax load they're already being forced to bear," Berthoud concluded. "But HB 688 is an especially harmful bill because it would target an activity that adds value and productivity to Louisiana's economy and its citizens' daily lives. Lawmakers should stop this predatory legislation before it gets a chance to pick apart taxpayers' wallets."

Because of the high stakes for taxpayers and the economy, NTU has actively sought more rational telecommunications tax policies at all levels. The citizen group's members have worked for elimination of the 3 percent federal excise tax on telephones, a permanent ban on discriminatory Internet access taxes, and reductions in so-called "E-911 surcharges" (which can discourage customers from purchasing mobile phone service in the first place). In the past year, NTU has waged campaigns on behalf of fairer and lower taxes on wireless and other phone services in Missouri, Pennsylvania, and Oregon (to name a few).

NTU is a non-partisan citizen group founded in 1969 to work for lower taxes and smaller government. Note: For more information on NTU's telecommunications policy work, visit www.ntu.org.

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