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Untitled Document
$7 Billion a Year of Taxpayer Money
Wasted?
Every taxpayer owes it to himself or herself to read the new report prepared
for The Seniors Coalition by George Mason University Law & Economics Professor
Thomas W. Hazlett. Click
here to view Professor Hazlett’s eye-opening report online.
Professor Hazlett examined the "Universal Service Fund" (USF) long-distance
tax on your phone bill. The USF mission sounds reasonable - a federal phone
subsidy for rural and low-income residents, as well as schools. So much for
good intentions! Hazlett's report shows how the nearly $7 billion Universal
Service Fund is now one of the most outrageous wastes of taxpayer dollars
in America:
No help for consumers in need. The "high-cost" support that
made up 85 percent of USF spending from 1998-2005 ends up lining the pockets
of wealthy rural telephone companies and their shareholders - not needy consumers.
Do taxpayers need to subsidize phone service for wealthy enclaves in Beverly
Hills, Virginia's Fairfax County and Vail, Colorado? NO!
"Gold-plated" inefficiency and waste. The USF operates
on a "cost plus" basis which means that Uncle Sam agrees to pay these rural
telephone companies pretty much whatever they decide to charge. The predictable
result: Companies run up outrageous annual corporate overhead costs of up to
$3,000 per subsidized phone line - several times more than the cost of a whole
year of wireless service! Does that sound like a wise use of taxpayer dollars?
NO!
No crackdown on outrageous bills handed to taxpayers. USF-subsidized
phone service costs taxpayers as much as $13,345 per line every
single year - several times more than what it would cost to give away satellite
phone service to those who really need it! Would you pay $13,345 per line for
phone service? NO!
A tax-and-spend mentality with zero accountability to taxpayers.
The USF is a taxpayer's nightmare. It is raised routinely without the elected
members of Congress signing off on the increases! Not surprisingly, this tax
skyrocketed from 3.2% of long distance revenues in 1998 to 10.9% by mid 2006.
Should the USF mission be expanded to underwrite even more waste and abuse?
NO!
The USF should only be used where it is truly needed and even then on a fair
and competitive "reverse auction" basis. Fraud and abuse in the system should
be stamped out before one additional dime of taxpayer money goes into the USF.
The Fund has to be capped and reined in. The time is now long overdue for Congress
to step in and put the brakes on this open-ended tax on your
hard-earned income.
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