Dear CommitteeMember:
On behalf of the National Taxpayers Union’s (NTU’s) 23,000members in Texas, I urge you to oppose House Bill 259 and House Bill 3675, bothof which would impose a new 6.25 percent tax targeted primarily at satellitetelevision. This levy will increase costs for many households, limitentertainment choices, and do nothing to improve Texas’ economic recovery.
A tax onsatellite television would punish hundreds of thousands of Texas householdssimply for choosing satellite over other types of service. The governmentshould not be in the business of making personal decisions for consumers,especially by dictating or influencing such choices through onerous taxpolicies. Furthermore, satellite television can be the only option for manyTexas families who live in the rural parts of the state where cable andbroadcast services are not readily available.
Someargue that this new tax is warranted in order to “level the playing field”because the cable television industry has paid “franchise fees” in exchange forrights-of-way to lay cable. But such fees are supposed to reflect a cost ofdoing business – rent for use of public property. In truth, whether paying forcable-maintenance trucks, transmission towers, federally owned spectrum, orsatellite fleets, each provider’s unique business model entails certainspecific costs as a precondition of getting their service into homes andbusinesses.
Clearly, the onerous franchise feenegotiation process that cable companies must navigate is not infallible, and someexperts estimate that as little as 10 percent of these fees actually go towardmaintaining public property while the other 90 percent is funneled to bloatedmunicipal budgets. That is precisely why the path to tax fairness andneutrality is through lowering those inflated charges, not through raisingtaxes on satellite customers. NTU would applaud such an effort and wouldeagerly assist you in making telecom tax reform a reality.
WhileTexas’ overall tax climate is better than those of many other states, some ofthe highest telecommunications taxes in the country are found within yourborders. This body should not add to those burdens by imposing a misguided taxon satellite television service. NTU urges you to oppose HB 259 and HB 3675 inthe name of fiscal responsibility and in consideration of financially strappedtaxpayers.
Sincerely,
Vice President of Government Affairs