The $5 Billion Update

On Monday, I blogged about some examples of ridiculous taxes and specifically mentioned the Federal Excise Tax on telephones. I also mentioned a website that would let you easily write letters to your Senators and Congressmen urging them to repeal the tax.

Yesterday, I received a reply from my Congressional representative here in Nashville. Congressman Jim Cooper wrote:

April 18, 2006


Mr. John Raine
XXXXXXXXXXXXXXX
Nashville, Tennessee 37217


Dear Mr. Raine:

Thank you for your letter regarding telephone taxes. I know that this
issue effects just about all of my constituents.

As you may know, the telephone tax was first imposed in 1898 as a
way to fund the Spanish American War. At the time, this tax was
considered a "luxury tax" because few people had phones. I agree
with you that imposing "luxury taxes" on telephone handsets does
not make much sense in this day and age. Most people consider
telephones a necessity rather than a luxury, and even wireless phones
are now commonplace. Unfortunately, this tax continues to bring
approximately $5 billion a year into the federal treasury, and repealing
telephone excise taxes without offsetting spending cuts or revenue
increases would increase the budget deficit. While I support a fix for
this nonsensical tax, I also believe that any repeal must also be done
responsibly, without worsening our nation's finances.

I appreciate your time, and thank you for writing to me. I look
forward to hearing from you in the future.

Sincerely,

Jim Cooper
Member of Congress

So there you have it. The Federal Excise Tax rakes in $5 billion a year and you probably didn't even know you were paying it before Monday. Congressman Cooper says that the federal government can't cut that tax without creating another tax to replace it so he's basically saying that even if we get rid of this one, there will be another one just like it somewhere else.

Personally I think there are quite a few things that could be cut from our federal budget. The
Porkbusters movement has shed a lot of light on the seemingly wasteful "pork" projects that billions of dollars disappear into each year. I think there are probably $5 billion dollars worth of projects that states could do without. Roxi on the other hand points at a more obvious budgetary drain that we can all read about every day: the war in Iraq. Even though Roxi and I don't agree on the purpose, I would definitely concede that a few billion dollars are most definitely being wasted in the effort.

So no matter how he states it, I reject Congressman Cooper's reasoning on the fact the government wastes well over $5 billion a year. If they have it, they'll spend it. Hell, they spend in excess of what they have every day! Taking back our hard earned money will go a long way to reining in frivolous congressional spending.