Why Aren’t More Fiscal Conservatives Up in Arms About This Outrageous Tax?

( – promoted by Paul R. Ferro)

Out of control taxes are a touchy issue for pretty much anyone on RMG. But many aren’t aware of this outrageous state tax that needs to be dragged behind the barn and killed forthwith.

My 15 minutes of fame came today in the form of a rant about this tax on the cover of the Boston Globe. See “Phone Tax Surprises Many at the Register” http://bit.ly/yUaapS

The story is, I bought an iPhone at a Verizon store in Shrewsbury earlier this month. It was a $199 iPhone 4s and I applied my $50 new-every-2-years credit for a total price of $149. For that, I paid a whopping $40.62 cents in state sales tax. That’s almost 30%! I asked them what was going on and they said it’s because of a Mass regulation.

Turns out, Beacon Hill decided back in the 1990s that cell companies providing “bundled” services should pay taxes on the full list price of the phone being purchased. Thus I paid 6.25% (sigh, I miss 5.25%) on the iPhone 4s list price of $650…not on the sale price of $149.

How unfair is that? If you buy a washing machine on sale, you pay tax on the sale price not the list price.

Beacon Hill claims this is a way to level the playing field for cell providers. What?!? Government intervention is the last place to look for intelligent insight into free markets.

And, as a friend in Cambridge rightly points out, everyone is acting like the cell companies (small and large) don’t tax you on the phone service each month at around 14%! Turns out, they tax you even more if you have a low price plan. How regressive can you get?

Which leads me to a sidebar: I think we need to gather together 100 cell phone bills and analyze the taxes that we are all paying. I have quick access to 5 or 10 bills. We need to gather more and have someone create a quick spreadsheet of the results.

This is government entitlement at its worst. And you know they are going to buck at dropping this tax now that smartphones cost an arm and a leg.

Proposed action plan:

1. Contact Rep. Dan Webster to support his proposal to do away with this tax provision

2. Analyze the taxes we pay on the service and get that info into the hands of all legislators

This year’s election is going to be all about free markets. I haven’t chosen sides yet, but I want to see all the R candidates getting their act together on a less government – lower taxes platform.

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