REFORMING
TELECOMMUNICATIONS TAXES IN VIRGINIA:
BACKGROUND MATERIALS
Presentation of
Jeffrey A. Eisenach, Ph.D.
President, The Progress & Freedom Foundation
before the Governor's Commission on Information Technology
October 26, 1999
Table One:
General Fund Excise Taxes
Product |
Revenue |
Share of On-Budget Federal Revenue |
Alcohol |
$7,215 |
0.53% |
Tobacco |
$5,657 |
0.44% |
Telecommunications |
$4,910 |
0.38% |
Source: Office of Management and Budget |
Figure One:
Telecommunications Tax Rates
1986-1998
Table Two:
State and Local Telecommunications Taxes
State |
Local/Municipal |
|
|
Source: AT&T, The Progress & Freedom Foundation |
Figure Two:
Composition of Telecom Taxes
Table Three:
The Impact of Telecommunications Taxes
on Broadband Penetration
Tax Rate |
Impact on Penetration (Percent) |
Households Denied Internet Access |
Children in Households Denied Internet Access |
1999 |
|||
16 % |
-7.5 % |
0.2 million - 2.9 million |
0.1 million - 1.9 million |
20 % |
-9.3 % |
0.2 million - 3.6 million |
0.1 million - 2.3 million |
33 % |
-18.9 % |
0.4 million - 7.3 million |
0.3 million - 4.8 million |
2002 |
|||
16 % |
-7.5 % |
1.2 million - 4.2 million |
0.8 million - 2.7 million |
20 % |
-9.3 % |
1.5 million - 5.2 million |
1.0 million - 3.4 million |
33 % |
-18.9 % |
3.0 million - 10.6 million |
1.9 million - 6.9 million |
Source: The Progress & Freedom Foundation |
Figure Three:
Combined State and Local Telecommunications Tax Rates
Figure Four:
State Telecommunications Tax Rates
Figure Five:
Local Telecommunications Tax Rates
Figure Six:
Average Monthly Taxes Per Line:
Selected Virginia Jurisdictions
Figure Seven:
Comparison of Annual Number of Returns
Table Four:
Telecommunications Taxes in the Twenty Highest-Tax Cities
City |
Tax |
|
Amount |
Rate |
|
|
$4.85 |
35.7% |
|
$2.57 |
27.7% |
|
$3.06 |
25.9% |
|
$2.74 |
25.3% |
|
$4.15 |
25.1% |
|
$2.63 |
24.9% |
|
$2.57 |
22.7% |
|
$2.55 |
22.5% |
|
$1.99 |
22.2% |
|
$2.44 |
21.7% |
|
$2.43 |
21.6% |
|
$2.10 |
21.0% |
|
$1.93 |
19.2% |
|
$2.14 |
19.0% |
|
$3.31 |
19.0% |
|
$1.97 |
17.5% |
|
$1.85 |
16.5% |
|
$1.73 |
16.2% |
|
$2.15 |
16.2% |
|
$2.48 |
15.2% |
Weighted Average (95 Cities) |
$2.04 |
15.7% |