Cathy - 04.13.2007

Today is tax day, and unless you’ve waited until the absolute last minute to file, you’ve probably heard of the Telephone Excise Tax, and are aware that you’ll be getting a refund for the taxes levied from March 2003 to July 2006. You may want to be aware that if you keep good records, and have your phone bills available from even part of that time period, you may be able to deduct more than the standard amount. I was able to deduct twice the standard amount simply by itemizing the charges from the past few years. You may be surprised.

The ridiculous thing about all of this is how this tax came about. As stated in the comic above, the tax was levied in 1898 to fund the Spanish-American War, back when residential telephones were a major luxury reserved primarily for the wealthy. Despite the fact that the war lasted only eight months, the American people have been charged this tax every month for the past 108 years.

This might not be a huge deal if it weren’t for the fact that this happens all the time. Laws are created as “temporary fixes” and then left in place indefinitely. Because the public is duped into believing that the laws (or taxes) are truly temporary, there is rarely any public outcry, and by the time anyone realizes that the government has no intentions of repealing the law, no one seems to care anymore.

One perfect example of this that relates to taxes is the idea of income withholding. This was introduced during World War II as a way to raise funds for the war. It was supposed to end after the war ended, but the government realized the power that income withholding held. When citizens never received their entire income, it didn’t hurt as much to part with it. Whereas before, every tax increase was felt by the populous, and could be rallied against, Congress could now raise taxes with impunity, and not worry about most of the public even noticing.

One potential solution that I’ve heard recently is automatic sunsets on every law and tax passed by Congress. With such a provision, every bill would automatically expire after a specific period of time (20 years, for example). At that time, Congress would have to revisit the issue and decide whether or not to renew the law.

I see very few problems with such a measure. Important laws that needed to be renewed would pass through easily. Other provisions that lacked public support would renew public debate and help Congress to really determine what their constituents wanted.

Once a law gets passed, they very rarely get repealed, even if they have very little public support. This type of sunset provision would have the opposite effect, requiring every bill to have continued public support, or else face an automatic sunset.

So what do you think about this?  Can you think of any downsides to a provision such as this?  Would there be measures that should be exempt from an automatic sunset?  If so, who would decide?  I look forward to your comments.