On November 16,
2015, the Tax Foundation released a new study authored by Scott
Mackey and Joseph Henchman showing that consumers are experiencing record high
wireless taxes and fees in 2015. Federal, state, and local taxes and fees combined
constitute nearly 18 percent of the average U.S. wireless customer’s monthly bill.
And while the price of the average wireless bill has been decreasing over the
past seven years, the nationwide average tax rate has been climbing quickly.
Among
the individual states, Maryland has the 14th highest wireless tax
rate and is significantly above the national average. Although Maryland’s ranking
went down slightly from 2014, when it was 13th
among states,
nevertheless its combined state and local wireless tax rate went up from 12.37
percent to 12.67 percent. This increase likely will cost Maryland wireless
consumers hundreds of thousands of dollars a year on top of the unreasonably
high tax burden they already incur.
As I stated in an April 2015 blog, wireless taxes
disproportionately impact poor families who rely on wireless devices as their main
form of communication and Internet access. Roughly 56 percent of all poor
American adults use wireless
Internet service as their only
connection, therefore high tax rates impose disproportionately burdensome costs
on low-income consumers. Taxes on communications
and Internet access should be kept as low as possible to push prices to an
affordable level so every consumer can get online.
Florida
led by example earlier this year
and reduced its wireless tax rate. It is time for Maryland and other states,
especially but not limited to those above the national average, to reduce taxes
to alleviate this burden on wireless consumers.
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