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Hiding Cell Phone Taxes Doesn't Make Them Go Away

from the hidden-taxes dept

Wed, Jan 23rd 2008 3:59pm — Timothy Lee

The Supreme Court has declined to hear a case regarding whether cell phone companies should be allowed to list taxes as separate line items on customer bills. Apparently, certain state governments have begun passing laws prohibiting companies from listing taxes as separate line-items on customer bills, requiring them instead to build those costs into the base prices they charge consumers. Cell phone companies argue that this makes it impossible for them to establish uniform nationwide pricing because they have to adjust the prices in each state to reflect the varying tax burden. This seems to me to be a pretty clear-cut effort by state governments to avoid scrutiny of the taxes they impose. Voters ultimately end up paying these costs whether they're listed separately on the bill or not, so this seems like little more than an attempt by state legislators to avoid accountability. Taxpayers have every right to know what fraction of their bills are going to the government. With the Supreme Court declining to weigh in on the issue, the issue has gone back to the FCC for further consideration. I hope they'll continue to push for greater transparency. Of course, it should be noted that the companies hands aren't totally clean here. While phone companies should be allowed to list extra fees when they're actually required to hand the money over to the government, we've noted before that they shouldn't be allowed to label as "fees" money they're planning to keep for themselves.

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Filed Under: fees, mobile operators, supreme court

13 Comments

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yo ho ho...., 23 Jan 2008 @ 4:12pm

If only....
... this applied to cell phone companies. All, and I mean ALL utility-based companies have added "fees" and disguised them as Federally mandated / required fees to screw consumers.

Landline phone companies; Cable companies; Gas and Electric; etc. This has been going on since the '70s and the lobbies are too powerful and prevent capital hill from reviewing these practices.

If you think I am exaggerating, do your homework. There have been numerous attempts at class-action lawsuits against these practices that have been summarily rejected!

Free money.... now that is a racquet
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sore, 23 Jan 2008 @ 4:21pm

you got sores
damn herpes
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Haywood, 23 Jan 2008 @ 4:49pm

I'm for it in this way:
If the fees and taxes had to be bundled into the price per month, never again would you sign up for a $59.99 package that ends up being $85.99 bottom line.
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Xanius, 23 Jan 2008 @ 4:52pm

Pfft, at least with those you know what's going to be on there.
Sprint just changed their terms on the 1st to where the fees are all covered under administrative fee and regulatory fee. This allows them to charge you for anything they feel like charging you for and you can't dispute it because you don't know what that fee actually is.
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Bryan Price, 23 Jan 2008 @ 5:08pm

The real problem?
What in the hell are the real taxes that I'm paying on the phone versus the extra fees that the phone company tries to fake me out as a "government" fee, when it's just going into their pocket.

I think it should be broken out in the bill, but if they're advertising, I'd like to see two numbers, how much I'm paying them, and how much I'm paying the government.
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Anonymous Coward, 23 Jan 2008 @ 5:32pm

List But Advertise Turthfully
I think it is a good idea for the fees to be listed separately on the bill. But, at the same time I also think the prices they advertise should include the fees in the advertised price. Low-balling the advertised price is a scam.
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Haywood, 23 Jan 2008 @ 5:38pm

Re: Xanius
"Pfft, at least with those you know what's going to be on there."

And yet, I don't care. All i care about is how much I pay for how much use, bottom line. If everyone had to play by the same rules I could price compare. If 39.99 was the price you pay all plans would have to compete in that tier. As it is they can advertise 39.99 and have final charges ranging from $50 to $80. and unless you hold them at gun point the only way to find out is to sign up and wait for the bill.
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Ryan, 23 Jan 2008 @ 7:37pm

compare to gasoline
I like the idea of including the taxes in the price. That is the current system for gasoline, and it makes it much easier as a consumer. I don't need to worry about the taxes, just the bottom line.
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José Luis, 23 Jan 2008 @ 8:16pm

tax credits
Here in Argentina telcos (specialy mobiles) a lots of fees as well.
Some of those fees are obviously taxes and, depending on yor tax status, some of that money can be discounted from net income in your yearly tax statement. That is, you don't pay taxes for money paid as taxes...

Maybe you can't do that in the US (i.e take credit for already paid taxes) but if you can and amounts suddenly get hidden... Well, you'll pay even more taxes...
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JPSobel, 23 Jan 2008 @ 10:37pm

No Separate Line Items for Questionable Fees
I agree that taxes imposed by governments should be able to listed as separate line items. However, I think that fees charged by the utility company or its associated businesses or organizations should have to be included in the base rate.
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Tack Furlo, 27 Jan 2008 @ 11:23pm

And the problem is?
What's the problem here? I mean, don't get me wrong, I want the people of the great state of New Jersey or California to pay the same for a cell phone plan as I do here in Alabama (I have a promotional plan, so even more so as it's a much better deal than what they offer today) but if a cell phone company is already charging me $39 to allow me to use an incredibly small slice of the public (to a certain extent) radio spectrum and even then just for 1,000 minutes (which is to say that easily $29 of that is pure profit) then why the hell would I care of the state takes $1 or $1.40 from the cell phone company as a tax? If anything, I like this idea, since under the terms of my promotional plan, they cannot modify what they charge me, at all, so if or when taxes hit $9 for my plan, I'll still be paying $39, instead of $39 plus $9 of taxes. For the phone company, sure, this is bad, because it makes their certifiably insanely large profits shrink down to just plain crazy large profits, and yes, maybe this will allow politicians to tax those companies to death (or, by the Southpark theory of piracy economics, from a Gulfstream 5 down to a Gulfstream 4) but frankly, if it makes enough money for the government to make the congress decide to end the sham that is the personal federal income tax, then I say give them a Gulfstream 3 tomorrow! Verizon or AT&T or Sprint can afford another $1 in taxes, and perhaps so can I, but I assure you that somewhere out there there's an 80 year old lady who signed up for a cheap, $19 basic plan just to call 911 (because a pushy salesperson lied to her and didn't tell her she doesn't need a plan at all to use 911) who's not able to heat her house one more day a month because she has to give that extra $1 in taxes on her phone bill.

Wouldn't we all rather our politicians roll around in their own filth a little more if it actually saves the individual consumers some money each month instead of costing us more?
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Byron Prochaska, 2 Dec 2008 @ 12:04pm

TAXES,
Whats going on with this? How can you get taxed four times on a cell phone, County tax, state gross tax, state tax, federal tax, and federal 911 tax, this SH** has to stop, do you just figure out how to rob the pockets of americans with BS taxes, WHY do we get taxed with so much bull shit, F*** federal government dont you think you take enough?
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Mekia, 11 Dec 2008 @ 9:40am

Taxes
I got charged $40 extra on my cell phone bill $35 of which was Fed Universal Service Charge... What is this?
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