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An Open Letter to Congress in Support of H.R. 3679, the State Video Tax Fairness Act

October 9, 2007

Dear Member of Congress:

On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write to strongly endorse the State Video Tax Fairness Act (H.R. 3679) sponsored by Congressmen Conyers, Cannon, Boucher, and Franks. This bill would address the growing issue of discriminatory state video services tax policy by prohibiting inequitable net taxes that are dependent on the mode of programming delivery. For example, six states (Florida, Kentucky, North Carolina, Ohio, Tennessee, and Utah) levy video service taxes on satellite television that are significantly higher than those levied on cable television. Passage of H.R. 3679 would help ensure that consumers -- not the states -- pick marketplace winners and losers.

Much of the debate over tax discrimination in the video services community has improperly focused on a form of "fairness" that only fills government's coffers further -- that is, making sure providers of similar services suffer the misery of equally harsh taxes. Policymakers would do well to remember that the "fairest" fee or tax rate -- for providers and taxpayers alike -- is zero. Telecommunications of all varieties have been targets for disproportionate and punitive taxes since the Spanish-American War, slowing much of the progress and productivity that could have emerged to enrich our society sooner.

Failing the most far-sighted tax policy of a zero rate, at the very least state and local governments should not discriminate among products or services by disadvantaging one with heavier taxes. Yet, as I mentioned earlier, inflicting the same measure of pain on all entities is no solution to the question of "fairness." Rather, taxes should be eased across the board. That is why NTU has championed reforms that would lower the tax burdens on all participants in the video services market.

If the House and Senate consider the State Video Tax Fairness Act, we would classify a vote in favor of H.R. 3679's original language as the "pro-taxpayer" position in our annual Rating of Congress. We urge your co-sponsorship of this important bill.


Pete Sepp
Vice President for Communications