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Wireless Subscribers Getting Taxed Big Time

U.S. wireless subscribers are paying a disproportionally large amount in taxes, according to a report released this week.

The report, authored by economist Scott Mackey of Montpelier, Vt.-based KSE Partners LLP, found that taxation on wireless services grew three times faster than the rate on other taxable goods and services between 2007 and 2010, resulting in billions in dollars in costs for wireless customers.

The average customer pays roughly $7.84 in taxes, fees and government surcharges, according to the report.

Mackey, who works with a coalition of wireless providers, said reform in tax policies would reduce costs for consumers and businesses and expedite the build-out of advanced wireless networks.”

The report found that the average consumer pays more than 16 percent of their wireless bill in federal, state and local taxes, fees and surcharges. For other goods and services, the average tax rate is 7.4 percent, according to the report, A Growing Burden, Taxes and Fees on Wireless Service.”

Although federal, state, and local taxes and fees all contribute to the high burden on wireless consumers, the recent increase in rates is mostly attributable to the rapid growth in the rate of the federal Universal Service Fund (USF),” the report stated.


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