Chairman Godshall, Ranking Member Daley, and Members of the House Consumer Affairs Committee,
On behalf of National Taxpayers Union’s (NTU) Keystone State members, we urge you to reject House Bill 1417. If enacted, the bill would raise taxes on wireless communication devices as well as Voice over IP (VoIP) to fund an expansion of the state’s Universal Service Fund (USF).
According to a recent study of combined federal, state and local tax levies on wireless communication, Pennsylvanians shoulder the ninth highest total tax burden in the country at over 20 percent. The tax increases encapsulated by House Bill 1417 would mean Pennsylvania’s total levy is fifth highest in the entire country. At a time when other states are cutting wireless taxes, House Bill 1417 would push the state in the wrong direction. Simply put, adding to the tax burden will hurt Pennsylvanians struggling to make ends meet and make the state less competitive.
State USFs have played a role in ensuring service to rural and underserved areas. As telecommunication competition and connectivity has increased, however, the role of USFs has diminished. Consequently, USF funding should diminish. House Bill 1417 would ignore this reality and further entrench USF funding at current levels, irrespective of the demands on the program.
Competition has improved quality while expanding choices and lowering prices for consumers. Rather than layering additional taxes on wireless devices, lawmakers in Harrisburg should look at ways to eliminate government barriers that hinder wireless innovation. Accordingly, NTU urges you to defeat the ill-conceived House Bill 1417.
Policy and Government Affairs Manager