The Administration believes that phasing out the Federal excise tax
on communications is a worthy policy objective. Although the
communications excise tax raises a significant amount of revenue, it is
economically inefficient and reduces the progressivity of our tax
system. Moreover, the tax is becoming increasingly difficult to
administer as technological advances blur the distinction between
taxable and nontaxable communications services. However, the
Administration believes that this and other important tax policy
objectives should be enacted only as part of an overall budget framework
for maintaining fiscal discipline, paying down the national debt,
extending the solvency of Medicare and Social Security, and maintaining
core government functions such as education and fighting crime.
Pay-As-You-Go Scoring
H.R. 3916 would affect receipts; therefore, it is subject to the
pay-as-you-go requirements of the Omnibus Budget Reconciliation Act of
1990. The Administration estimates that receipts would be reduced by
$1.5 billion in FY 2001 and $20 billion over FY 2000-2005. The absence
of any offsets could cause a significant sequester of Federal resources.
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