December 10, 2005

Prosecute Excise Tax Scofflaws -- And The Companies That Aid And Abet Them

Would you be permitted to leave the store without paying sales tax on your purchases? No -- and the store would be prosecuted if it failed to collect the tax.

Will the gas station deduct all the taxes from your gasoline purchase and permit you to leave without paying the full price on the pump, just because you object> Again, no -- and you would be stopped if you tried to leave the station without paying.

And we won't even get into what would happen if your employer stopped taking out taxes from your paycheck and you refused to pay income taxes.

Why, then, is this allowed to continue?

For Seattle peace activist Bert Sacks, the monthly act of resistance adds up to only 59 cents. Symbolically, however, refusing to pay the "war tax" on his Qwest phone bill represents a pocketbook protest against what he sees as misuse of U.S. military power.

"I object to the U.S. government policy of using famine and epidemic as tools against civilian populations. That's wrong," says the retired engineer, who has fought for a decade to get economic sanctions against Iraq lifted.

Sacks is one of thousands of Americans believed to be refusing to pay the federal taxes attached to their monthly phone bills -- money that helps fund military operations overseas.

Many are taking the step as a protest against the war in Iraq. And in many cases, the phone companies are helping them do it.

"We oppose the policies of 'pre-emptive war' and an 'endless' war on terrorism, which led to the Iraq war, which violate human rights and international law, and which have cost us hundreds of billions of dollars while our states and cities face unprecedented deficits, and cutbacks of vital services and programs," reads the statement on a Web site called hanguponwar.org.

And yes, phone companies are actively participating by waiving the tax and dropping it from the bills of those who ask.

Qwest Communications International Inc., which provides local phone service to most of the Seattle area, thinks the excise tax is "a silly tax that should go away," company spokeswoman Shasha Richardson said.

The Denver-based company said it adjusts customers' bills to remove the excise tax. It then complies with IRS Publication No. 510, Richardson said.

That publication requires providers of local, toll or private communications services to impose and collect a 3 percent tax on services rendered. If customers fail to pay it, the companies must give the IRS a list of those customers' names and addresses, the services provided, the dates and the amounts the customers owed.

Some phone companies may repeatedly insist that the money is due. Others, such as Qwest, make it easy for the protester.

"We believe this is an illegal tax, and we would support any legislation that repeals it," said John Britton, a spokesman for AT&T.

He said AT&T will routinely eliminate federal excise taxes from customers' monthly bills if asked to do so in writing.

"We'll go into our system and make an adjustment," Britton said. "But we will have to report you to the government."

For its part, Cingular Wireless sends a letter to tax-resisting customers agreeing that the federal excise tax is "antiquated and discriminatory" and that it has "has far outlived its purpose."

"Please be aware, however," Cingular's letter warns, "that as required by law, Cingular Wireless will report your non-payment, and provide your name, address, amount of tax written off to the IRS."

Cingular, MCI and Verizon Wireless all say they adjust customers' monthly bills to write off the federal excise tax on a regular basis.

The companies above are clearly complicit in the criminal activity. Why are they not being prosecuted -- and in the case of the wireless companies, why are their frequencies not being taken back?

And what is this "illegal tax" garbage that is being put out by AT&T?

Well, it might have something to do with the fact that the government is also failing to go after those who refuse to pay. One woman reportedly has not paid since the Reagan Administration.

Tax evasion and conspiracy to evade taxes. Should be grounds for a nice long prison sentence -- and a fine that will more than cover back taxes and the cost of prosecution.

Posted by: Greg at 03:45 AM | Comments (5) | Add Comment
Post contains 741 words, total size 5 kb.

1 I agree with you that the government ought not to allow people to dodge taxes, but prison sentences are a bad idea. Just give them a fine large enough to make it not worthwhile, and the problem will disappear. Also, the companies appear to be complying with existing law by reporting the scofflaws.

Posted by: Dan at Sat Dec 10 05:36:04 2005 (aSKj6)

2 While you are correct from a strict obedience-to-the-law perspective, you seem not to be aware that this excise tax was a temporary tax established in 1898, note, the 19th century, to pay for the Spanish-American war, and never repealed.

I don't think protesting the Iraq war this way is so smart, but I do think that protesting a lieing, overtaxing government is a good idea.

Posted by: Dave at Sat Dec 10 05:49:35 2005 (5cjGW)

3 Actually, Dave, if you read the article you will note it war repealed in 1902, reinstituted during WWI and WWII, and left in place afterwards to help defray the cost of Korea, Vietnam, and other Cold War engagements. It was reauthorized by the Democrat-controlled Congress in 1990 when the forced Bush to give in on his "No New Taxes" pledge, and has remained in place ever since. The GOP attempted to repeal it in 2000, but Clinton refused to let them -- and the Crusade Against Islamist Terror has been a reason to keep the tax inplace since we were attacked on September 11. In short, Your LP source is only artly correct in the version of the story it supplies.

I've got no problem with protesting government -- and no problem with protesting taxes -- but outright defiance of this sort is inappropriate.

Posted by: Rhymes With Right at Sat Dec 10 06:00:24 2005 (mmrAh)

4 You're right on the details of the tax, but I don't see a factual omission in the article. The party politics you've added doesn't really address whether the tax itself is appropriate. And we'll just have to disagree about the correctness of outright defiance. I happen to think that that old Tea Party was and is a good idea.

Posted by: Dave at Sat Dec 10 06:14:35 2005 (5cjGW)

5 I think that the Tea Party was a great idea -- and the minute these folks choose to throw their phones into the Bay as a form of protest, I will support them.

Let them live without telephone service to show how committed they are to their alleged beliefs.

Posted by: Rhymes With Right at Sat Dec 10 07:22:19 2005 (YMzHW)

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