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Regulation

Excise Tax Excised?

9:40 AM -- There's some exciting news on the telecom tax relief front.

The Wall Street Journal has reported this morning that the Treasury Department is taking steps to remove the pesky 3 percent telephone excise tax that is tacked on to your phone bill every month, after a judicial ruling. In fact, there is a movement afoot to actually refund some of the taxes.

As reported here previously, the telephone excise tax was levied in 1898 on telephones -- then considered luxury items -- to help fund the Spanish American War. Its recent purpose has become somewhat of a mystery, and several judges have declared that it no longer serves its orginal purpose. Over the years, Congress has tried to repeal the tax to no avail.

One question that isn't answered is how the billions of dollars in revenue will be replaced -- or how the budget would be cut to accomodate the tax cut.

Of course, there's a new war to fund these days, and people are also buying all sorts of new luxury telecommunications items. So watch out for that Palm/BlackBerry/iPod/Tivo excise tax that could be cropping up.

— R. Scott Raynovich, Editor in Chief, Light Reading

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