Gore Tax

Gore Tax - Thanks Calmal897

On Thursday, May 27, the Clinton-Gore-controlled Federal Communications Commission raised taxes on every American who places a long-distance telephone call by more than $700 million. It did so by raising the "Gore Tax" (also known to Washington bureaucrats as the "e-rate") to $2.4 billion each year. This is a new, $2.4 billion tax INCREASE imposed without a specific vote of Congress.

Here's how it works: In 1996 Congress passed a law requiring telecommunications carriers to provide discounted services to schools and libraries. Rather than set the discount rate (which would have been easy, and simple), the Clinton/Gore-controlled FCC decided on its own to levy a new tax on EVERYONE who makes a long-distance telephone call, send the money to Washington, create a big new bureaucracy headed by a political flack for Al Gore, and then send the money back to selected schools and libraries.

The new tax adds between 4% and 5% to every American's long distance telephone bill.

Because the Clinton/Gore Administration doesn't want to take the political heat for a $2.4 billion tax increase, the FCC strangely refuses to call the "e-rate" a tax. Instead, using typical Washington doublespeak, they call it a "mandatory contribution." Of course, the Gore Tax meets every definition of a tax: it is levied by government, compliance is not voluntary, funds are paid to a government agency, and it is paid in exchange for a service.

Here's why the Gore Tax is bad:

1. It's a stealth tax. The FCC voted on 5/27/99 to prohibit telephone companies from telling consumers they're being charged for the tax.

2. Its unnecessary: government already spends more than $10 billion each year to upgrade schools' computer systems and connect them to the Internet. Even three years ago, 78% of schools were already connected to the Internet.

3. It's incredibly wasteful and inefficient: because the Clinton/Gore-controlled FCC decided to create a bureaucratic "middleman" to collect and distribute Gore tax money, it took more than 2 1/2 years after the law was passed before schools and libraries began receiving benefits.

4. It duplicates other federal programs: federal spending on upgrading technology in schools is a mess, and the Department of Education can't even account for just how many billions of dollars it spends through more than 20 different programs to upgrade technology in schools.

For more information on the Gore Tax, visit Americans for Tax Reform's web
site at <http://www.atr.org/>http://www.atr.org, or the National Taxpayers
Union's web site on the Gore Tax at <http://www.goretax.com/>http://www.goretax.com.

I'm sure your members of Congress would appreciate hearing your views on the
Gore Tax and HR 692, the "E-Rate Termination Act." The Congressional switchboard phone
number is: 202/224-3121.

Bridgett Wagner
Director
Coalition Relations
The Heritage Foundation