Government Suddenly Realizes Spanish-American War Ended 108 Years Ago
In 1898, the US government enacted an excise tax on phone calls — essentially a luxury tax based on the distance the call traveled — to help pay for the Spanish-American War. Despite the war lasting a scant four months, the tax has lived on, in one form or another, ever since, and as the distance a call travels now has little relation to its costs, many consumers and phone companies argued it was irrelevant. So finally, more than 100 years after the war it was supposed to pay for ended, the Treasury Department will scrap the long-distance tax on cell phones and internet calls, as well as some landlines and allow people to get refunds for the last three years’ worth through a tax credit. The move will cost the government about $5 billion per year in lost revenue — the main reason it had resisted cutting the tax for so long, despite several court rulings that it was no longer applicable to flat-rate or unlimited long-distance calling plans.