The Truth, The Whole Truth, and Nothing But . . .

The bottom line is that the Big Telecoms don’t want to play by the rules like every other business. They just want special treatment when it comes to regulatory and tax issues.

The Big Telecoms are going state-by-state and carving out special tax exceptions for themselves. For instance, in just the past two years, they’ve succeeded in slicing $1.3 billion in property off local tax rolls in Massachusetts alone.

What communities stand to lose

Is it fair for average citizens and other businesses to shoulder the tax burden lifted from the telecom industry?

Local communities could lose $8 billion in revenue annually if Congress acts to further restrict state and local taxing authority. That could cost over 150,000 teachers, police officers and firefighters their jobs.

Is it fair for average citizens and other businesses to shoulder the tax burden lifted from the telecom industry?

Potential Impacts on Our Communities of an
$8-Billion-a-Year Cut in Telecommunications Taxes

	Elementary School Teachers (a)	Secondary School Teachers (a)	Police Officers (b)	Firefighters (c)
Median salary	$45,658	$46,119	$34,738	$32,162
Median salary plus benefits	$59,584	$60,185	$46,896	$40,524
No. corresponding to a $0.25 billion revenue reduction	4,196 teachers	4,154 teachers	5,331 police officers	6,169 firefighters
No. corresponding to a $1 billion revenue reduction	19,850 teachers, police officers, and firefighters
No. corresponding to an $8 billion revenue reduction	158,800 teachers, police officers, and firefighters

a. Source: Mini-Digest of Education Statistics 2003, National Center for Education Statistics, U.S. Department of Education, October 2004, Table 16, p. 20. b. Source: 2004 Municipal Yearbook, International City/County Managers Association (ICMA), 2004, Table 3/5. The median is for the entrance salary for police officers. c. Source: 2004 Municipal Yearbook, ICMA, 2004, Table 3/6. The median is for the entrance salary for firefighters. d. Figures for police and fire benefits, as a percentage of salary, are calculated from ICMA’s Police and Fire Personnel, Salaries, and Expenditures, 2005; figures for teacher benefits are projected to be the average, as a percent of salary, of the police and fire benefits.

The Big Telecoms are crying broke while raking in unprecedented profits.

The current debate on telecom taxes is based on a study that the telecommunications industry funded in 2004 referred to as the COST Study. It erroneously concluded that local governments were unfairly charging them for doing business.

Since then, a new study has shown that findings from the 2004 COST study were, at best, built on a series of inaccuracies.

The Real Deal

• The telecommunications industry is taxed at rates significantly lower than some other industries, such as the utility industry.
  
  
• The telecommunications industry pays essentially the same level of property taxes as other businesses.
  
  
• In some cases, the telecommunications industry pays lower corporate income taxes than many “general businesses.”