FCC’s Proposed Change Could Raise Phone Taxes

FCC‘s Proposed Change Might Raise Phone Taxes

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Americans are speaking out versus a proposal by the Federal Communications Commission (FCC) that might raise countless individuals’s phone costs. The proposal by FCC Chairman Kevin Martin has to do with a tax called the Universal Service Fund (USF).

The USF tax was established to assist ensure that low-income and rural customers have access to affordable phone services. Currently, USF cash is gathered on a “pay-for-what-you-use” system; a tax based on just how much interstate long distance a person utilizes. The less an individual uses long distance, the less he or she pays.

However, the FCC is proposing a regular monthly flat fee rather. The proposed month-to-month flat fee would use to all phone numbers and other connections, regardless of how couple of interstate phone call are made. That might raise taxes on 43 million U.S. families by more than $700 million.

Callers in California, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New york city, Ohio, Pennsylvania, Texas and Virginia stand to be the biggest losers. Taxpayers in 10 of those 12 states-all but Texas and Minnesota-already pay more in federal USF taxes than their states get back for schools, hospitals and rural connectivity. Under the proposed FCC plan, that variation would grow even wider. The most conservative estimate of the proposed plan-where the USF fee would move from the existing structure to a flat $1 charge, per phone line, per month-indicates that 11 of the 12 states would end up paying more into the USF than they presently do.

According to the Keep USF Fair Coalition, a consumer advocacy group, this USF proposal has serious ramifications for the future of telephone service across the country. The proposed USF change likewise influences anybody who has good friends or family members in any of those 12 states, or does business with an individual or company located there.

With low-income and elderly customers already hit with high gas prices, higher house energy costs and continued inflation in medical prescriptions, the vast array of diverse groups in the Keep USF Fair Union is opposing the FCC’s proposed “number”-based strategy. These groups warn against balancing USF financial resources on the backs of the very customers whom they were meant to help.

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