Americans are speaking out against a proposal by the Federal Communications Commission (FCC) that could raise millions of people’s phone bills. The proposal by FCC Chairman Kevin Martin has to do with a tax called the Universal Service Fund (USF).
The USF tax was established to help ensure that low-income and rural consumers have access to affordable phone services. Currently, USF money is collected on a “pay-for-what-you-use” system; a tax based on how much interstate long distance a person uses. The less a person uses long distance, the less he or she pays.
However, the FCC is proposing a monthly flat fee instead. The proposed monthly flat fee would apply to all phone numbers and other connections, regardless of how few interstate long-distance calls are made. That could raise taxes on 43 million U.S. households by more than $700 million.
Callers in California, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Ohio, Pennsylvania, Texas and Virginia stand to be the biggest losers. Taxpayers in 10 of those 12 states-all but Texas and Minnesota-already pay more in federal USF taxes than their states get back for...
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