Washington imposes 2nd heaviest cell phone tax

By: Richard S. Davis
12:00 am
January 30, 2013

The combined state-local tax on cell phone users in Washington is 18.62 percent. According to a new Tax Foundation study, that’s the second highest rate in the nation. Only Nebraska, at 18.67 percent, is higher. The weighted state-local across the country is 11.36 percent. The feds tack on another 5.82 percent.

The Tax Foundation notes,

States favor cell phone taxes because they can raise revenue in a relatively hidden way. Texas even sued Sprint because the company listed a state tax as a line-item on its bill rather than hiding it from customers.

Increasing reliance on cell phones causes revenues from the hidden tax to soar. Among the problems the Foundation cites in its conclusion:

Making cell phone calls and using wireless services for additional purposes may be getting easier, but paying cell phone taxes is not. State and local governments should not single out one product for stealth tax increases as they are doing with wireless services. Such actions distort market decisions and risk slowing investment that contributes to economic growth.

Right.

Categories: Categories , Current Affairs , Economy , Tax Policy.