It was only 108 short years ago that Teddy Roosevelt resigned his commission as Assistant Secretary of the Navy to join the forces in Cuba fighting the Spanish American War. In July of 1898, he and his band of Rough Riders launched their legendary charge up San Juan Hill.
In that same year, Congress enacted a tax to help finance what TR called this “splendid little war”. The tax — a temporary tax, of course — was set at one cent for all long-distance calls lasting more than 15 minutes. Since only about 1300 Americans had phones in 1898, the income to the Treasury wasn’t substantial.
Of course, that was then. Fast forward 108 years, where this tax is now at 3% and where phones are a bit more commonplace. As a result, this “temporary tax” brings in about $5 billion in annual federal revenue.
That is, until now…
Yesterday, the Treasury Department — aided in its deliberations by several successful court challenges by opponents of the tax — decided to drop it altogether. This, of course, brings a more or less official end to the Spanish-American War. Rep. Paul Ryan (R-WI) had the same thought we did in the press statement he put out yesterday.
By the way, Treasury has dropped this tax on long-distance service, but there is still a tax on local phone service which requires Congressional action to repeal. Rep. Gary Miller (R-CA) and Sen. Rick Santorum (R-PA) have introduced a bill to do just that. Apparently, such a bill passed years ago, but was vetoed by then-President Clinton.
And so we welcome the end of the last vestige of the not-too-recent unpleasantness and urge everyone to keep this episode in mind next time Congress gets the brainy idea for another “temporary” tax.
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