Wireless Taxes and Fees: A Tragedy of the Anticommons [telecom]

Two researchers at George Washington University's Mercatus Center have analyzed the tax burden telephone users bear, and found that it's out of proportion to other levies.

by Matthew Mitchell, Thomas Stratmann Jan 23, 2012

Combined federal, state, and local taxes on wireless services are about twice as high as the average retail sales tax. While the normative justification for above-average taxation of wireless service is weak, there is a compelling public-choice explanation: The mobile service tax base appears to suffer from a tragedy of the anticommons. That is, multiple parties have the power to block or partially block access to a resource, resulting in under-utilization of the resource.

Numerous overlapping tax authorities seek to obtain revenues through wireless-service taxation, and this may lead to overexploitation of the tax base. The anticommons problem has two dimensions. First, the mobile-service tax base funds numerous distinct projects at each level of government. Second, the base is taxed by numerous overlapping levels of government.

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Reply to
Bill Horne
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In California at least cities can't tax cell phones, the reason is because the nature of the phone; not used in the city were it is billed. Some years ago Riverside tried it and was blocked from doing so. In January a third party billing service for Sprint and T-Mobile added a city utility users tax, the city had no idea it was being billed until they started getting calls, it took Sprint 2 months until they were able to stop the billing, we have yet too get a refund, even more stupid is the city was sent 2 checks for over $120,000 each and they are trying to send the checks back.

Reply to
Steven

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