The average US tax rate for most goods is 7.07 percent, but the taxman has a special affinity for wireless phone and data services, which are taxed at a whopping 15.9 percent when you combine state, local, and federal taxes. This high number may be a relic from the time when a cell phone was a luxury, but those days are far behind us; cell phones are the choice of many low-income individuals, especially those who move frequently. Now, two senators want to put the kibosh on any future tax raises for five years.

Already a fierce supporter of network neutrality, Senator Ron Wyden (D-OR) has decided to tackle rising taxes on wireless service. "Americans are being hit hard with rising costs for gas, health care, and food for the dinner table. Americans need to know that their cell phone bills won’t be the next cost to spiral out of control,” he said in a statement announcing the "Mobile Wireless Tax Fairness Act of 2008.”



Ron Wyden

The bill is co-sponsored by Senator Olympia Snowe (R-ME), who has previously partnered with Senator Byron Dorgan (D-ND) on network neutrality legislation. Snowe wants an end to "these excessive and discriminatory taxes" that discourage wireless use, particularly for "low-income individuals and families" who rely on their cell phones. “By banning these taxes, we can equalize the taxation of the wireless industry with that of other goods and services and protect the wireless consumer from the weight of fees, surcharges, and general business taxes.”

According to a copy of the bill seen by Ars Technica, "No State or local jurisdiction shall impose a new discriminatory tax on or with respect to mobile services, mobile service providers, or mobile service property, during the 5-year period beginning on the date of the enactment of this Act." Local tax raises are fine, but they cannot single out wireless service.

Should the bill pass—and it's unlikely to do so during this session of Congress—it would do nothing to lower existing tax rates, simply prevent discriminatory increases in the future. State and local governments watching the issue will no doubt take away one main lesson: if we're going to jack up wireless access taxes even higher, we'd better get jacking!