Overview
Title
To amend the Internal Revenue Code of 1986 to repeal the excise tax on telephone and other communications services.
ELI5 AI
H.R. 7276 is a plan to get rid of an extra tax people pay when they use phones or other ways to talk to each other, making it cheaper to use these services.
Summary AI
H.R. 7276 proposes to eliminate the excise tax on telephone and other communication services by amending the Internal Revenue Code of 1986. The bill is introduced by Mr. Connolly and Mr. Thompson of Pennsylvania and has been referred to the Committee on Ways and Means. The changes will affect the sections of the tax code that currently impose additional taxes on these services, and the new rules will apply to bills first rendered more than 90 days after the enactment of the Act. This legislative action aims to reduce the tax burden associated with telephone and communication service usage in the United States.
Published
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AnalysisAI
Summary of the Bill
House Resolution 7276, introduced during the 118th Congress, proposes to amend the Internal Revenue Code of 1986 by repealing the excise tax on telephone and other communications services. In essence, the bill seeks to remove this specific tax, making the necessary legal adjustments to maintain coherence throughout the Code. If passed, the changes would take effect for bills that are rendered more than 90 days after the law's enactment.
Summary of Significant Issues
One of the primary concerns with the bill is its impact on government revenue. The repeal of the excise tax means a reduction in tax income without any outlined compensatory measures to offset the financial shortfall. Moreover, the bill does not provide a rationale for the tax repeal, which could lead to suspicions about whether it disproportionately benefits certain groups. The highly technical language used in the amendments complicates public understanding of the bill, as it requires legal or tax expertise to decipher. Additionally, the effective date provision is ambiguous, referring to a timeline without specific dates, which might lead to enforcement issues. The bill also lacks clarity about which stakeholders were mainly affected by the tax, leaving questions about the socioeconomic impacts of its repeal.
Potential Impact on the Public
For the general public, the repeal of the excise tax on communication services could lead to reduced costs associated with telephone and other communication services, potentially making these services more affordable for consumers. However, this benefit comes at the cost of reduced federal revenue, which might affect public funding and services if compensatory financial measures are not implemented. This trade-off might result in decreased quality or availability of certain public services in the long run.
Impact on Specific Stakeholders
Telecommunications companies might experience a positive impact from the bill, as removing the excise tax could lower operational costs and pricing barriers, possibly leading to increased usage and expanded customer bases. On the flip side, sectors relying on federal funding derived from such taxes might face adverse effects due to decreased government revenue, potentially impacting projects and services supported by these funds.
Without a clear rationale for the repeal, there is a risk of perceived favoritism towards industries or groups that benefit disproportionately, sparking skepticism or political pushback. Transparency around the motivations and consequences of the tax elimination is crucial to ensuring that the potential advantages align equitably across different communities and stakeholders.
Issues
The repeal of the excise tax on telephone and other communications services reduces government revenue without a clear explanation of how this loss will impact public finances or if there will be any compensatory measures to counterbalance the financial deficit. This issue is in Section 2 but applies broadly to financial and public policy implications.
The bill fails to provide any justification or rationale for the repeal of the excise tax, which makes it challenging to understand if the repeal is intended to benefit specific groups or sectors, raising concerns of potential favoritism. This issue is present in Section 2.
The language used in the bill, especially in relation to the technical amendments to sections like 4293, 6302(e), 6415, and 7871(a), is highly technical and could be incomprehensible to those without specific legal or tax expertise. This hinders public understanding and engagement with the legislation. These issues are in Section 2, subsections (b) and (c).
The effective date clause introduces potential confusion by stating 'amounts paid pursuant to bills first rendered more than 90 days after the date of the enactment of this Act' without specifying exact dates. This could lead to enforcement challenges or public confusion. This issue is located in Section 2, subsection (c).
The bill does not clarify which sectors or stakeholders were primarily affected by the previously imposed taxes, thus preventing a comprehensive understanding of the broader economic and social impact of these changes. This lack of transparency is found throughout Section 2.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill gives it a name, allowing it to be called the “Telephone Excise Tax Repeal Act of 2024”.
2. Repeal of excise tax on telephone and other communications services Read Opens in new tab
Summary AI
The section repeals the excise tax on telephone and other communications services by removing subchapter B from the Internal Revenue Code of 1986. It also makes related adjustments to ensure consistency throughout the Code, and this change will take effect with bills rendered more than 90 days after the law is enacted.