79 Percent Tax Rate on Telecom

With all the rhetoric about the US heading toward European levels of taxation, few in the MSM are taking into account the fact that in many respects, we are already there. 

My current VOIP telephone contract runs out in a few days.  Since I use the line infrequently, I planned to switch to a lower cost plan.

The company offered a plan for $11.99 per month, or $143.88 for the year.   However, this total did not include taxes and fees.  Though I knew these would be significant, I had no idea how much so.  Defining a “tax” as a payment that is not voluntary, the taxes and fees turned as follows:

$23.88 – Regulatory Compliance and Intellectual Property Fee

$23.88 – Emergency 911 and Information Services Fee

$28.76 – Sales Tax

$30.82 – Federal Program Fee

$ 6.24 – County 911 Fee

Total Fees and Taxes:  $113.58

Taking out the “Regulatory Compliance and Intellectual Property Fee” (which really covers operating expenses of the company and is not included in the base rate in order to make the rate appear lower than it really is), the total fees and taxes are still a hefty $89.70.  

Taxes and Fees as a Percentage of Service Cost: $113.58/$143.88 = 78.9%.

Or if we exclude the “Regulatory Compliance Fee” noted above, $89.70/$143.88 = 62.3%.  

While I could stomach $144 for a backup line, tacking between 62 and 79 percent onto that cost tipped the cost/benefit calculation the other direction.

We’re already being taxed like Europeans.   We just nickel and dime customers and hope they don’t pay too much attention (which sadly, they don’t – at least not yet).

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