Defeat for a new 'little tax'

Defeat for a new 'little tax'

June 18th, 2009 in Opinion Free Press

The problem with lots of "little taxes" scattered here and there is that none of them individually seems like much of a blow to your wallet. It's in their entirety that they are crippling.

You may not think much about a few cents in state and local sales taxes on the purchase of a candy bar, especially by comparison with sky-high federal income tax rates. But it's a different matter when you consider the sales taxes on all the things you buy over the course of a year -- and how much higher the price of those goods is because of the many hidden taxes that have been imposed along the way on the manufacturer, the retailer, etc.

Well, the Internal Revenue Service thought it had a plan for another "little tax," but fortunately it has backed down.

The IRS proposed that if your employer provides you a cell phone for work use, you should automatically have to pay taxes on 25 percent of the use of that phone. Why? Because the IRS assumes that at least 25 percent of your use of the cell phone must be for personal rather than business purposes. (Under existing law, workers may document that such phones are for work only and can avoid being taxed. Many simply ignore the tax.)

The IRS said it was trying to "simplify" tax law, The Washington Post reported, and said it would seek public input on the plan until Sept. 4. But that didn't last. Whether it was a public outcry or something else, the agency has suddenly withdrawn its bad proposal.

Even if the American people never see a single bill tallying up all the income, sales, business, gasoline and countless other taxes they pay, they realize they are being taxed too much. We're glad this latest tax hike scheme was defeated promptly.