[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

WIRELESS TAX FAIRNESS ACT OF 2011

=======================================================================

HEARING

BEFORE THE

SUBCOMMITTEE ON COURTS, COMMERCIAL
AND ADMINISTRATIVE LAW

OF THE

COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

H.R. 1002

__________

MARCH 15, 2011

__________

Serial No. 112-22

__________

Printed for the use of the Committee on the Judiciary

Available via the World Wide Web: http://judiciary.house.gov

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COMMITTEE ON THE JUDICIARY

LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina JERROLD NADLER, New York
ELTON GALLEGLY, California ROBERT C. ``BOBBY'' SCOTT,
BOB GOODLATTE, Virginia Virginia
DANIEL E. LUNGREN, California MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio ZOE LOFGREN, California
DARRELL E. ISSA, California SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana MAXINE WATERS, California
J. RANDY FORBES, Virginia STEVE COHEN, Tennessee
STEVE KING, Iowa HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona Georgia
LOUIE GOHMERT, Texas PEDRO PIERLUISI, Puerto Rico
JIM JORDAN, Ohio MIKE QUIGLEY, Illinois
TED POE, Texas JUDY CHU, California
JASON CHAFFETZ, Utah TED DEUTCH, Florida
TOM REED, New York LINDA T. SANCHEZ, California
TIM GRIFFIN, Arkansas DEBBIE WASSERMAN SCHULTZ, Florida
TOM MARINO, Pennsylvania
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona

Sean McLaughlin, Majority Chief of Staff and General Counsel
Perry Apelbaum, Minority Staff Director and Chief Counsel
------

Subcommittee on Courts, Commercial and Administrative Law

HOWARD COBLE, North Carolina, Chairman

TREY GOWDY, South Carolina, Vice-Chairman

ELTON GALLEGLY, California STEVE COHEN, Tennessee
TRENT FRANKS, Arizona HENRY C. ``HANK'' JOHNSON, Jr.,
TOM REED, New York Georgia
DENNIS ROSS, Florida MELVIN L. WATT, North Carolina
MIKE QUIGLEY, Illinois

Daniel Flores, Chief Counsel

James Park, Minority Counsel

C O N T E N T S

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MARCH 15, 2011

Page

THE BILL

H.R. 1002, the ``Wireless Tax Fairness Act of 2011''............. 3

OPENING STATEMENTS

The Honorable Howard Coble, a Representative in Congress from the
State of North Carolina, and Chairman, Subcommittee on Courts,
Commercial and Administrative Law.............................. 1
The Honorable Steve Cohen, a Representative in Congress from the
State of Tennessee, and Ranking Member, Subcommittee on Courts,
Commercial and Administrative Law.............................. 12
The Honorable Trent Franks, a Representative in Congress from the
State of Arizona, and Member, Subcommittee on Courts,
Commercial and Administrative Law.............................. 17

WITNESSES

The Honorable Zoe Lofgren, a Representative in Congress from the
State of California
Oral Testimony................................................. 13
Prepared Statement............................................. 15
Scott R. Mackey, Partner, KSE Partners LLP
Oral Testimony................................................. 18
Prepared Statement............................................. 21
Bernita Sims, Councilwoman, City Council of High Point, North
Carolina
Oral Testimony................................................. 40
Prepared Statement............................................. 42
Harry Alford, President and CEO, National Black Chamber of
Commerce
Oral Testimony................................................. 45
Prepared Statement............................................. 47

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of Kurt Zellers, Speaker of the Minnesota
House of Representatives, submitted by the Honorable Howard
Coble, a Representative in Congress from the State of North
Carolina, and Chairman, Subcommittee on Courts, Commercial and
Administrative Law............................................. 60
Prepared Statement of the Federation of Tax Administators,
submitted by the Honorable Howard Coble, a Representative in
Congress from the State of North Carolina, and Chairman,
Subcommittee on Courts, Commercial and Administrative Law...... 65

APPENDIX
Material Submitted for the Hearing Record

Article entitled ``Taxing cellphones as a luxury good is
outdated,'' by Timothy Noah.................................... 72

WIRELESS TAX FAIRNESS ACT OF 2011

----------

TUESDAY, MARCH 15, 2011

House of Representatives,
Subcommittee on Courts,
Commercial and Administrative Law,
Committee on the Judiciary,
Washington, DC.

The Subcommittee met, pursuant to call, at 1:37 p.m., in
room 2141, Rayburn Office Building, the Honorable Howard Coble
(Chairman of the Subcommittee) presiding.
Present: Representatives Coble, Gallegly, Franks, Reed,
Ross, Cohen, Conyers, Johnson, Watt, and Quigley.
Staff present: (Majority) Daniel Flores, Subcommittee Chief
Counsel; Travis Norton, Counsel; John Hilton, Counsel; Allison
Rose, Professional Staff Member; Ashley Lewis, Clerk;
(Minority) James Park, Counsel; and Norberto Salinas, Counsel.
Mr. Coble. The Subcommittee will come to order.
We will make our opening statements brief as we usually try
to do because of the time frame. There will be action on the
floor subsequently.
I am pleased to be an original cosponsor of H.R. 1002, the
``Wireless Tax Fairness Act of 2011''. There are over 290
million wireless subscribers in the United States. Wireless
service is important whether your car breaks down on the
highway and you need to call for help or you are a small
business with traveling salesmen who use e-mail and telephone
to remain in contact. In recent years, many American families
have dropped their land line and use wireless service as their
primary telephone.
With wireless service so widespread in today's society,
State and local taxing authorities have begun to impose higher
tax rates on wireless service than on other goods and services.
In part, this is a vestige of the Ma Bell era when telephone
companies could impose high taxes under a regulated monopoly
structure. But as States and localities continue to find
themselves in financial distress, some have continued to single
out wireless subscriptions as a source of additional revenue.
In Nebraska, for example, a consumer pays a 19 percent tax on
his wireless bill compared to the general sales tax rate of 7
percent. In my home State of North Carolina, the consumer pays
almost 2 percent more in taxes on wireless than on other
services. There is no principled reason why State and local
taxes on wireless service should be higher than taxes on other
services. Such high taxes are akin to so-called ``sin'' taxes
such as those imposed on liquor and tobacco products.
The Wireless Tax Fairness Act would impose a 5-year
prohibition on any new wireless taxes. Current wireless tax
rates, even if discriminatory, would not be changed by this
bill, and I think that is probably the right way to go. Thus,
State and local revenue projections would not be affected
unless a State wants to admit that it is planning a new
discriminatory wireless tax in the near future. This bill would
give States breathing room to reform their wireless tax policy
at the State and local level.
This bill would also reduce the tax burden on America's
small businesses, most of which rely on wireless service for
employee communication and e-mail. It would enable small
businesses to use the money they would have paid in taxes to
create jobs and grow the economy.
I am pleased to support this legislation and recognize the
Ranking Member, the distinguished gentleman from Tennessee, Mr.
Cohen.
[The bill, H.R. 1002, follows:]

__________
Mr. Cohen. Thank you, Mr. Chairman. I appreciate your
scheduling this bill for a hearing. It is a very important
bill. Last September, in the not too distant past in what some
of my colleagues call the good old days when I was Chairman of
this Subcommittee, we passed out a similar bill, H.R. 1002, the
``Wireless Tax Fairness Act.'' I supported the legislation
similar in the 110th and 111th, and I am an original cosponsor
of this legislation.
If enacted, this would impose a 5-year moratorium on any
new discriminatory State or local taxes on mobile services,
mobile service providers, or mobile service property. The
legislation's near-term goal is to protect consumers of
wireless services from further increases in their wireless tax
burden during the moratorium.
In the long run, my hope is the moratorium will lead to a
comprehensive set of principles for State and local taxation of
all telecommunication services regardless of platform that all
the relevant stakeholders can agree to voluntarily. This way
Congress would not need to repeatedly revisit this issue on how
States tax communication services. My fear is that, absent such
a comprehensive solution, Congress may be compelled to impose
one that leaves none of the stakeholders happy. Hopefully we
can all get together.
The fact is the tax structures of many States fail to
account for the advent of wireless communications, cultural
lag. And this failure by States will inure to our constituents'
detriment.
Wireless communication services have become exponentially
more integral to the daily lives of Americans over the last
decade. As of the end of 2008, more households chose wireless
service over land line service as their sole source of voice
communications and this trend has only continued since then. I
know not too long ago, I looked at people that only had
wireless communications and thought that was like Star Wars.
Now I am one of those people.
Particularly troubling is the possibility that
discriminatory State taxation of wireless telecommunication
services has a disparate impact on racial and ethnic
minorities. According to the Washington Post, 60 percent of
Latino and African Americans access the Internet using wireless
services which is a rate higher than the population as a whole
and ``others'' groups. Therefore, the burden of higher taxes on
wireless services fall disproportionately on their shoulders.
And wireless service, in general, is a regressive tax, and
something State and local governments too often easily resort
to is regressive taxes that hurt the most under-represented
people and the most needy people in their jurisdictions.
Having been a State Senator for 24 years in a State that
has a regressive tax system and a local elected official also,
I am not insensitive to the concerns of State and local
governments, but I do believe they need to use the main tools
at their disposal which is property taxes and income taxes and
sales taxes and not necessarily find these new regressive taxes
to hurt minorities and other folks.
I am mindful of the resentment that local governments might
feel when Congress intervenes, but nevertheless in this
circumstance, I think we are looking out for the little fellow
and that needs to happen and fairness. Sometimes the State
governments are right and sometimes they are wrong, but in this
one I think they are wrong.
Representative Lofgren has been the prime sponsor. I
appreciate she is going to be a witness today and she has been
a stalwart person on this. She probably had wireless phones way
before I even thought about it back when I was thinking they
were Star Wars. She is so advanced.
At this time, H.R. 1002 is really a modest bill. It does
not seek to override existing discriminatory State taxes on
wireless services. It simply seeks to prohibit new
discriminatory taxes for the next 5 years. All the
stakeholders, include the telecommunication industry and the
State and local governments, should use the moratorium to find
a long-term solution to the taxation of communication services
fair to everyone and bring us into the 21st century.
I thank all our witnesses but particularly Ms. Lofgren who
has been such a leader on this issue, and I look forward to
their testimony.
Thank you, Mr. Chairman. I yield back the remainder of my
time.
Mr. Coble. Thank you.
Does the gentleman from Michigan want to be recognized, Mr.
Conyers?
Mr. Conyers. No, thanks, sir. I am troubled by the bill,
but I do not have an opening statement.
Mr. Coble. I thank you, sir.
As I said in my opening statement, I think it is
significant to note that the current rates would not be
changed. I think that makes good sense.
Now, there was some confusion surrounding this. I did not
know that Ms. Lofgren was to be a witness. It was her
understanding that she was to be a witness. So I have agreed to
let her give her statement, and I would like for the Members
probably not to question her because of the interest of time.
I think I would also indicate that the distinguished
gentleman from Arizona, Mr. Franks, is the lead Republican on
this bill. Am I correct, Mr. Franks? So you and Ms. Lofgren
have shared that.
So Ms. Lofgren, why don't you give us your statement? Then
we will recognize the witnesses who will appear before us.

TESTIMONY OF THE HONORABLE ZOE LOFGREN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA

Ms. Lofgren. Thank you very much, Mr. Chairman, and thank
you for your flexibility on the miscommunication. I understand
that my full statement will be made part of the record, so I
will just make a few brief comments.
This is the third Congress where I have introduced this
bill, and I want to especially thank Mr. Franks, who is the
principal cosponsor, for his cosponsorship but also for the
hard work that he has put into this measure and getting
cosponsors to the measure as we have introduced it.
Mr. Coble. Well, Ms. Lofgren, if you would yield, I
appreciate you saying that, and after your statement, if Mr.
Franks wants to be heard for his opening statement, we will do
that as well.
Folks, I am not trying to rush anybody. We are all on a
tight timeframe because of floor action. So you proceed, Ms.
Lofgren.
Ms. Lofgren. Thank you very much.
When it comes to taxes, we know that not only are taxes a
source of revenue for government, which is necessary, but how
we tax has an impact on what people do. And when it comes to
telecommunications, the taxes are really not well aligned with
what our purpose is for the Internet. In fact, wireless
services are taxed nationwide at an average of rate of 16.3
percent, whereas other goods average 7.42 percent. In New York,
it is nearly 23 percent, nearly 21 percent in Illinois, 21.5 in
Florida, 23.5 in Nebraska. These are jurisdictions where cell
phone access to the Internet is taxed like a sin tax. Really
you would think that we were trying to discourage people from
accessing the Internet using a mobile platform which is far
from the truth. It is at odds with the national policy to
expand our broadband network.
And as Mr. Cohen has mentioned, there is this aspect. These
discriminatory taxes especially discriminate against low-income
individuals because low-income individuals access the Internet
through their mobile platform considerably more frequently than
do more affluent individuals, and the reasons are obvious.
Getting a DSL line or a cable line, an expensive laptop or
desktop computer is a lot of cash. A cell phone can access the
Internet in a very affordable way, and that is why communities
of color, low-income communities increasingly utilize this
platform for access to the Internet. That is a good thing not
only for those communities, but it is good for our country and
we should not discourage it.
As the Chairman has noticed, this is a moratorium on taxes.
I served on the board of supervisors for 14 years in Santa
Clara County. I well understand the need that local governments
have for revenue, but this does not decrease revenue. It just
prohibits discriminatory taxes in the future. If you do a 1
percent tax on everything, it would not exclude this, but you
can't tax cell phone access like a sin tax if this measure
passes.
It is regressive. It is unfortunate, and it is something
that we need to do something about on a bipartisan basis.
Ordinarily I support local governments and State governments in
setting their own taxing policies, but when the outcome is so
at odds with the Nation's policy to expand broadband access, I
think we have to act, and I am glad that we are doing so with
such support across the Congress and on a bipartisan basis.
Again, thanks to Mr. Franks and to you, Mr. Chairman.
And I would yield back my time with thanks for the
opportunity to appear.
[The prepared statement of Ms. Lofgren follows:]

__________

Mr. Coble. I thank you, Ms. Lofgren.
The gentleman from Arizona who is a Member of this
Subcommittee, Mr. Franks, do you want to be heard?
Mr. Franks. Well, thank you, Mr. Chairman. I will be very
brief.
Thank you, Ms. Lofgren.
Mr. Chairman, I want to thank you for scheduling this
hearing today on H.R. 1002, the ``Wireless Tax Fairness Act of
2011.'' Congresswoman Lofgren and I reintroduced H.R. 1002 last
Thursday with the broad bipartisan support of 144 original
cosponsors.
Access to wireless networks represents a key component of
millions of Americans' livelihoods, providing the efficient
communication capabilities, whether a phone or broadband or
Internet or otherwise, necessary to run a successful business.
The exorbitant taxes on wireless customers are not only
unfair, they are counter-intuitive, yet adding another costly
impediment to the success of so many American businesses which
are already struggling in the midst of a prolonged recession
and already a hefty tax burden.
These taxes also single out low-income and senior Americans
who frequently rely on wireless service as their sole means of
telephone and Internet access.
H.R. 1002, the ``Wireless Tax Fairness Act,'' provides a
balanced approach, in my judgment, that protects the revenue
needs of States and localities while allowing for a 5-year
hiatus to develop a rational tax regime that maintains the
affordability of wireless services.
As Chairman of the Subcommittee on the Constitution, I am
sensitive, Mr. Chairman, to the constitutional implications of
any legislation that comes before us and the limits on the
Federal Government's power. However, the mobile nature of
wireless services and the ability to use such services all
across the country clearly grants Congress the power to, quote,
regulate commerce among the States.
Additionally, the Fourteenth Amendment provides that no
State shall deny to any person within its jurisdiction the
equal protection of the laws. Under section 5 of the Fourteenth
Amendment, Congress shall have the power to enforce by
appropriate legislation the provisions of this Article.
So, Mr. Chairman, I believe that H.R. 1002, the ``Wireless
Tax Fairness Act,'' is a constitutionally sound, pro-consumer
bill, pro-business bill, and I strongly encourage this
Subcommittee and the full Committee to mark up this bill as
expeditiously as possible so that it can be considered by the
full House.
And I thank Ms. Lofgren and I thank you, Mr. Chairman, for
holding this hearing.
Mr. Coble. I thank the gentleman.
Ms. Lofgren, you may be excused.
While the witnesses find their way to the table, I will
give some background on them.
Mr. Scott Mackey is a partner at KSE Partners LLP. Mr.
Mackey is an expert in tax policy and wireless communications.
He is former chief economist at the National Conference of
State Legislatures. For 10 years, Mr. Mackey focused his
studies on taxation of electronic commerce and
telecommunications tax reform. He has testified before panels
all over the country and has been quoted extensively on CNN,
the New York Times, the Wall Street Journal, and USA Today.
Mr. Mackey is a former legislative assistant to Senator
James Jeffords. He received his bachelor's degree in economics
from Middlebury College and his M.B.A. from the University of
Colorado.
Ms. Bernita Sims sits as a city council member from High
Point, North Carolina. And I must say to my colleagues I am in
a bind. I had a very good visit with my friends from the
furniture capital of the world last night, and I told Ms. Sims
we are on different sides of this issue. She said, well, I am
going to bring you around tomorrow.
But Councilwoman Bernita Sims, it is good to have you and
other members of the High Point City Council with us today.
Ms. Sims has been a member of the High Point City Council
since December 2003 where she is the current chair of the
Public Service Committee, a member of the Planning Committee,
and liaison to the local Alcohol and Beverage Commission. She
was elected mayor pro tem in December of 2005 by her fellow
council members and served a 1-year term.
She serves on the National League of Cities Committee on
Finance, Administration, and Intergovernmental Relations. She
is also the chairman of the Finance and Legislative Action
Committee for the North Carolina League of Municipalities. Last
year she received the High Point Chamber of Commerce Minority
Business Associate of the Year Award.
Bernita, good to have you with us. Scott, good to have you
with us.
Our last witness today is Mr. Harry Alford who is the
President and CEO of the National Black Chamber of Commerce.
Mr. Alford is a major advocate for advancing African American
businesses in the United States and around the world. Because
of his extensive involvement in international business, Mr.
Alford was recently named Cultural Ambassador by the United
States Department of State. Mr. Alford also sits on the board
of directors for the National Newspaper Publishers Association
and writes weekly business columns for their members. He is an
active member of the board of directors of the Chamber of
Commerce and a consultant to several corporations and
publications.
It is good to have each of you with us.
The ground rules, folks. We try to comply with the 5-minute
rule. We apply that rule to ourselves and to you all as well.
And when you see the panel before you, when that light turns
amber, that is your warning that the ice upon which you are
skating is becoming thin, and you will give a minute, of
course, to pare down. But when the red light appears, that is
your signal that your 5 minutes have elapsed.
So, Mr. Mackey, why don't you kick us off?

TESTIMONY OF SCOTT R. MACKEY, PARTNER,
KSE PARTNERS LLP

Mr. Mackey. Thank you very much, Mr. Chairman, Mr. Cohen,
Members of the Subcommittee.
I am here to report on a study that I have just recently
completed that is attached to my testimony. I have been doing
this for about the last 7 years.
And basically the findings of my study, as has already been
discussed, is that the average wireless consumer pays over 16
percent of their bill in wireless taxes and fees versus just a
little over 7 percent in the State sales tax. So there is a big
disparity, as folks have already mentioned so far, between what
wireless consumers pay and what you pay for things you buy over
the counter at the store.
Unfortunately, this disparity is growing. As I have done
the study over time, I have found that while the disparity has
always existed, the disparity is getting worse. And in fact,
between 2007 and 2010 when this study covers, wireless taxes
and fees grew three times faster than the sales taxes. So there
is a problem and the disparity is getting worse.
And I think one of the reasons that it is important for the
time out that is being contemplated in this bill is that if we
are ever going to get our hands around this problem and get the
States and localities and the stakeholders to work this out, we
have got to stop the problem from getting worse because the
worse it gets, the harder it is to solve.
The opening statements have really covered a lot of the key
issues, so I will be very brief in terms of why policymakers
should care about this issue.
The first one, obviously, as was alluded to by many of the
speakers, is the disproportionate impact of these taxes, the
regressive nature of these taxes, and the disproportionate
impact on low-income people and on minority communities.
Clearly, the facts are not in dispute. Low-income people are
increasingly relying more on wireless as their sole
communications link and these taxes apply much more heavy
burdens, as a share of income, than on wealthier individuals.
Particularly one of the disturbing trends of going to very high
per-line charges, for instance, in the City of Baltimore where
they just raised the tax to $4 per line per month--so if you
have a family share plan with three or four lines, you are
paying $4 per month on each one of those lines even though, in
some instances, the actual cost of adding a line is only $5. So
in the case of Baltimore, the tax burden on those individual
additional lines is over 100 percent.
The second reason I think that this bill is very important
is for the reason stated by Representative Lofgren at the
outset of her remarks. We have government policies seemingly
working at cross purposes here where through the stimulus
programs and through other efforts, States are trying to
encourage the deployment of better and faster wireless networks
and the roll-out of those. So on the one hand, we are trying to
promote, incentivize, and encourage it, and on the other hand,
in some instances in some States, we are taxing at such high
rates that it discourages the use. So you have got government
policies working at cross purposes. And this bill would help to
stop the problem from getting worse and give us time to try to
sort all this out.
And finally, as was alluded by the Chairman, the impact on
business costs. Businesses, including our own small business
where we have outfitted half of our employees with multiple
mobile devices, are increasingly relying on this technology to
increase productivity, profitability, and ultimately this will
lead to creation of jobs. But these taxes do impact businesses
significantly. It is not just consumers that are paying them.
And so by causing a time out on these taxes, it is going to
prevent the burden from getting worse on the small businesses
that are using wireless technology.
So this bill, in conclusion, does not fully address the
problem, but it does cause a pause and a time out, so hopefully
collectively we can address the problem. And if we don't do
this, I fear that the disparity and the dependence on these
revenues by local governments is going to get worse. It is
going to increase, and therefore it is going to make it that
much harder to solve this problem down the road.
So I appreciate the opportunity to testify before you
today. I look forward to any questions you might have. And
again, I thank you for the opportunity.
[The prepared statement of Mr. Mackey follows:]

__________

Mr. Coble. And Mr. Mackey, you beat the red light. You were
a speed merchant. Thank you, sir.
Ms. Sims, we would be glad to hear from you.

TESTIMONY OF BERNITA SIMS, COUNCILWOMAN,
CITY COUNCIL OF HIGH POINT, NORTH CAROLINA

Ms. Sims. Chairman Coble and distinguished Members of the
House Subcommittee on Courts, Commercial and Administrative
Law, my name is Bernita Sims. I am a council member from the
City of High Point, North Carolina. In addition, I serve on the
Finance, Administration and Intergovernmental Relations
Committee of the National League of Cities.
I appreciate the opportunity to appear before you today on
behalf of the National League of Cities, the United States
Conference of Mayors, the National Association of Counties, the
Government Finance Officers Association, and the National
Association of Telecommunications Officers and Advisors.
Let us be clear. This bill is not about expanding broadband
technology or providing tax parity for an overtaxed industry.
Rather, this bill is about special treatment and favoritism for
wireless phone companies that continue to experience explosive
growth and profits. The current tax treatment of wireless
services by Federal, State, and local authorities has not
hindered product innovation, service growth, or industry
profitability. In fact, the wireless communications industry is
a strong and successful industry with vibrant subscribership
levels and revenues.
If there is one thing all of our organizations share, it is
our longstanding opposition to efforts by Congress to preempt
State and local taxing authority. How to levy taxes fairly, how
to ensure there is no discrimination among companies that
provide different forms of the same service, and how to protect
local government revenues are all appropriate debates. But
these debates belong at the State and local levels. And this is
why our associations unite in opposing this bill.
Local governments exercise their taxing authority to the
extent provided by State law. As a result, local taxing
authority and practices differ from State to State. And
oftentimes, taxing policy differs from county to county and
city to city within the State. But this is good because this
means that every local government taxing authority tailors is
tax policy by taking into account the sources of revenue
available and the needs and wants of its residents. More
importantly, the local officials making these decisions are
accountable by the ballot box to those paying the taxes that
support the services they use. Our citizens do not need to be
protected by the long arm of the Federal Government. They
already have the power to change locally imposed taxes.
In today's difficult economic times where State aid to
local governments has decreased dramatically, local taxing
autonomy is crucial in helping to ensure that the needs of
local citizens, our mutual constituents, are met. The ability
to make taxing and other fiscal policy decisions at the local
level without Federal interference enables High Point to
provide the quality services my constituents expect.
Some argue the proposed 5-year ban set forth in this bill
wouldn't hurt State and local governments because they can
still continue to collect the taxes they currently impose. But
this misses the point. What this legislation does is preempt
State and local taxing authority and represents a Federal
intrusion into historically protected State and local tax
classifications. Enactment of this bill would lead other
industries to seek preferential tax treatment at the expense of
State and local budgets and taxpayers. This slippery slope
necessarily leads to an erosion of our system of federalism and
a direct threat to the fiscal health of State and local
governments.
It is important to remember that State and local
governments, unlike the Federal Government, must balance their
budgets. In this tough financial climate, this isn't an easy
task and the impact of decisions made by local elected
officials are felt immediately by constituents. Hard and
oftentimes unpopular choices, like those made by High Point,
must be made. Even my counterparts at the county level are
leaving no stone unturned to rein in spending, as demonstrated
in a recent survey by the National Association of Counties.
Essential services may be cut. Public employees may be laid
off. Infrastructure repairs and construction may be put on
hold. And, yes, taxes may occasionally have to be raised. But
what is important to emphasize is that when balancing the
budget, all options must be on the table. What this bill does
is takes away one of these options, to tax the wireless
industry, at the expense of other taxpayers and businesses. To
have the Federal Government, which has difficulties balancing
its own budget, seek to tie the hands of State and local
lawmakers through the misguided enactment of legislation such
as this is simply wrong.
Americans are benefitting from being able to access the
mobile industry or make a phone call at any time and anywhere.
Whether wireless technology is being used by other industries
such as health care, education, transportation, or energy,
these results affirm our industry is revolutionizing and
improving the way we live and work.
Furthermore, State and local taxes on wireless services are
not an obstacle to wireless broadband deployment.
The economics of the industry will not be changed by
preemption of State or local taxes. Wireless carriers will
quite rationally still invest their resources in the most
potentially lucrative areas and will still set their prices at
the highest aggregate rates they believe the market will bear.
Finally, let me say this. Our associations support the need
for State and local governments to stand on their own and use
all tools and resources available to them to balance their
budgets, while continuing to provide essential services. Not
always, but in some cases, taxation of the wireless industry,
even at higher rates than other industries, might be one of
those tools. It is incumbent for all Members of Congress to
support their hometown leaders.
I urge you to oppose this bill.
Thank you.
[The prepared statement of Ms. Sims follows:]

__________

Thank you, Bernita Sims. I appreciate your testimony.
Mr. Alford, we would be glad to hear from you.

TESTIMONY OF HARRY ALFORD, PRESIDENT AND CEO, NATIONAL BLACK
CHAMBER OF COMMERCE

Mr. Alford. Chairman Coble, Ranking Member Cohen,
distinguished Members of the Subcommittee, thank you for
allowing the National Black Chamber of Commerce to provide
testimony concerning the Wireless Tax Fairness Act of 2011.
When the National Black Chamber of Commerce was
incorporated in 1993, the U.S. Census Bureau was reporting
300,000 Black-owned businesses with annual revenues of $30
billion. As of 2007, it now reports 1.9 million Black-owned
businesses with annual revenues of $137 billion. We are the
fastest growing segment of the American economy. The future
seems to be bright as African Americans have nearly $1 trillion
in disposable income, according to Selig School of Business,
and our businesses have yet to capture that majority of the
market.
Still, our economic status is fragile. Unemployment in
Black communities soars over the national average and it is
currently at 16 percent. The recession is taking its toll. The
saying ``when most people catch a cold, Blacks will catch
pneumonia'' still applies. We can look at what the subprime
mortgage debacle did to our communities. African Americans
literally lost over 35 percent of their net worth from this
malicious scandal. Our life spans make our Social Security
contributions more or less a transfer of income. Sometimes our
economic future seems to be very tenuous.
Yes, we have a smaller pie to cut from when it comes to the
cost of living. This is why we support the Wireless Tax
Fairness Act of 2011 because new discriminatory taxes and fees
on wireless services are regressive and significantly increase
consumers' and businesses' costs of services. State and local
tax increases fall disproportionately on African Americans,
minority small businesses, and the elderly.
As the economic status of the African Americans is at the
bottom rung of the American economy, they will suffer the most
from these discriminatory taxes. Our Black-owned businesses
will suffer from a consumer base that is weakening and that
will greatly lessen the opportunity to create more jobs. Hence,
the staggering 16 percent unemployment level may even increase.
That chance of making education affordable will also lessen.
Unfair taxation is a problem for our communities.
We should concentrate on further deployment of broadband as
it is a greater factor in doing business and provide security.
Cell phones are no longer a luxury item. They are a necessity
to our daily living. Minority-owned businesses and small
businesses that are leading the U.S. out of the recession are
dependent on access to wireless products and services. It
enhances communication, information, education, and creates
many opportunities for employment and wealth building. Current
tax levels on mobile devices resemble luxury taxes such as
liquor, cigarettes, and jewelry.
Local communities should consider ways to increase
employment via entrepreneurship. This will increase the payroll
tax base and that will offset budget challenges.
Finally, the Wireless Tax Fairness Act of 2011 will help
stabilize taxes as stakeholders work to determine what is best
for consumers, businesses, the economy, and the further
deployment of wireless services in rural and urban areas.
Your consideration of supporting this legislation is indeed
appreciated. I look forward to it passing through Congress and
being signed by our President. Thank you very much.
[The prepared statement of Mr. Alford follows:]

__________

Mr. Coble. Thank you, Mr. Alford.
We will now examine the witnesses.
Ms. Sims, let me ask you this question. How does the City
of High Point currently tax wireless subscription?
Ms. Sims. We currently do not tax wireless subscription. It
is done at the State level. It comes back to the city in the
form of taxes and user fees from the State.
Mr. Coble. Now, it has been said by some, Ms. Sims, that a
high wireless tax is regressive and therefore burdens low- and
middle-income subscribers with a higher effective tax rate as
opposed to higher-income subscribers. What do you say to that?
Ms. Sims. Well, Congressman Coble, I say that whenever it
comes down to an issue where we are talking about taxes, quite
naturally the conversation shifts to how it impacts individuals
in the community who least have the ability to pay. But I must
say that in my community, I have not seen one individual--I
don't know of anybody who doesn't own a cell phone, and none of
them have ever complained about the taxes that are associated
with the use of that phone. They complain about the rate that
they are charged for the use of the phone, but nothing
regarding taxes.
I don't necessarily subscribe to the notion that it imposes
an unfair tax burden on those individuals who are least able to
pay. I don't subscribe to that.
Mr. Coble. I thank you for that.
Mr. Mackey, State and local governments seem to agree that
wireless tax reform is needed. So why have they made such
little progress in reducing wireless taxes on their own accord?
Mr. Mackey. That is a great question. As I listened to one
of the other witnesses say that we ought to be sorting this out
at the State and local level, some of us have been working on
this issue for 10 or 12 years. We tried--and I work a lot on
State tax policy with legislatures--through the Governors
Association, the National Conference of State Legislatures to
raise the issue. They have encouraged reforms. But at the end
of the day in that whole 10-year period, there has only really
been one significant tax reform and that was in the State of
Virginia which was successfully able to broaden the base, lower
the rates down to the sales tax rate. Actually, I am just about
to publish another study that shows that local governments in
Virginia are better off under the reform than they were under
the old high-rate tax system.
So in terms of why that hasn't happened, I think the reason
is it is a very difficult conversation to have particularly in
the States where because wireless used to be a monopoly and so
there were all these monopoly local taxes that were imposed,
they are reliant on those taxes and it is a very difficult
conversation to have to try to figure out a path toward getting
off the reliance of those wireless revenues. So the reason it
hasn't happened is because there hasn't been the political will
at the State level to force those conversations.
One more quick point is that I think the conversations are
going to have to happen because we are at the point now where
consumers who are pretty savvy are starting to realize that
they have different options for purchasing communication
services and other entertainment services, and we are starting
to see migration toward Netflix and other forms. So there is
going to be a conversation that is going to have to happen at
the State and local level because the current system where you
load certain services with high taxes and other services don't
have any at all, it is just going to collapse. And those
revenue losses are going to occur anyway. And we think this
legislation will help us begin those conversations and stop the
problem from getting worse.
Mr. Coble. Let me try to get one more question in before my
5 minutes expire.
Mr. Alford, the National Black Caucus of State Legislators
and the National Hispanic Caucus of State Legislators have
supported this legislation in the past because presumably of
the effect of high wireless taxes on their constituent
communities. Can you elaborate, sir, on how these communities
are particularly affected by high wireless taxes?
Mr. Alford. Yes, sir. There is a growing dependence and a
growing necessity on the use of wireless and mobile devices. I
think there is a misperception by some that we are taxing
wireless phone companies. We are not taxing the companies. We
are taxing families and individuals. They are the ones who are
paying the bill. And I think the wireless phone companies are
American heroes in leading the way for us to be globally
competitive.
So it is pretty simple. If you have got $5 and you have to
give up $2 and the guy next to you has $10 and he has to give
up $2, I think the guy with the $10 is less angry or less
hurt--it is simple math--than the guy who has $5.
Mr. Coble. Thank you, sir.
Mr. Cohen, I beat the red light. I want you to take notice
of it. I yield to you.
Mr. Cohen. Thank you, Mr. Chairman.
Mr. Mackey, in a previous life, what organization did you
represent?
Mr. Mackey. The National Conference of State Legislatures.
Mr. Cohen. And how many years were you with the National
Conference of State Legislatures?
Mr. Mackey. Almost 10.
Mr. Cohen. And what was your position there?
Mr. Mackey. When I left, I was the chief economist and
staffed the telecommunications tax task force which I believe
you served on.
Mr. Cohen. And based on those 10 years of experience with
State legislatures, how would you rate overall State
legislatures taxing authority compared to the Federal
Government? Is it more progressive or more regressive?
Mr. Mackey. I think it is more regressive due to the higher
reliance on consumption and property taxes, whereas the Feds
tend to rely more on income-based taxes. So it is more
regressive.
Mr. Cohen. Do you remember a Senator from Tennessee named
Leonard Donovan?
Mr. Mackey. Yes.
Mr. Cohen. He said--and I don't think he coined this. I
know he didn't. But somebody said don't tax me, don't tax thee,
tax that many behind that tree. Is that not more or less the
mantra of most State legislators? Some State legislators.
Mr. Mackey. I would say some, yes.
Mr. Cohen. And is the wireless tax something that would
fall into that category? People don't really think about it. It
is just a doodad here and a dabble there. Like Everett Dirksen
said, eventually it adds up to real money.
Mr. Mackey. I think that is right. I mean, one of the
issues is that unlike many goods and services that are sold,
either historically or by grants of authority, legislatures
have allowed local governments, municipalities primarily, more
tax options on this service. And so what you see are multiple
taxes from multiple governments appearing on the same bill. And
so I do think, in a given State, the one municipality might not
see the totality of all the taxes. They only see their piece.
And because of that, what ends up happening is the aggregation
of all these taxes ends up putting a significant burden on the
consumer.
Mr. Cohen. In your recent special report, you indicate
State and local and Federal taxes and fees combine to an
average of over 16 percent nationally for wireless subscribers.
How much of that percentage is based on national taxes and
fees?
Mr. Mackey. 5 percent of that is the Federal, the Universal
Service Fund.
Mr. Cohen. And what impact will H.R. 1002 have on those
taxes and fees?
Mr. Mackey. It would not affect the Federal Universal
Service Fund.
Mr. Cohen. Right, and that is 5 percent. And the 11 percent
is what is put on there.
Thank you, sir.
Is it Councilman or Commissioner Sims?
Ms. Sims. Councilwoman.
Mr. Cohen. Councilmember Sims. I appreciate your service in
local government and representing your group.
But let me ask you this. H.R. 1002 simply imposes a 5-year
moratorium on new discriminatory taxes on wireless services.
State and local government will still be able to tax wireless
service and providers as long as they are not discriminatorily
applied, you know, a general tax, not specifically picking out
just one service.
Why should Congress not impose such a simple moratorium
when it is not banning all taxes on wireless services, simply
discriminatory taxes?
Ms. Sims. Well, based on the fundamental principle of how
we operate as local municipalities, we don't think that you all
should be in the business of banning it at all, and that is the
core principle of where we are coming from, that we should be
allowed at the State and local level to impose those taxes and
make those decisions on our own. So the moratorium, regardless
of whether it is only for 5 years--we don't think it should be
there at all, that we should still be given the authority to
work and to do what we have to do to balance our budgets.
Of course, we all know from an economic perspective we are
all challenged. Everybody is trying to figure out how to make
this thing work, and the more that we start to get into the
issues around technology services--and that is what this all
falls into is the whole technology realm--to say that it is
sacrosanct and you can't do what you need to do at the local
level to generate revenues we think is just wrong.
Mr. Cohen. Mr. Mackey, is taxing of wireless services kind
of a new kid in town and starting to be a source of funding for
State and locals? Wireless has only been around--what? How many
years?
Mr. Mackey. 15 or so.
Mr. Cohen. And they started taxing it when?
Mr. Mackey. A lot of the taxes that apply to local land
line service were applied to wireless in the late 1990's in the
beginning of the year 2000. Back then it was viewed as sort of
a luxury tax and it is only the rich that could afford it. So
let's apply these taxes. But obviously, things have changed
since then.
Mr. Cohen. And they are starting to be discriminatory taxes
applied since?
Mr. Mackey. Pretty much since. And then what we have seen
is just sort of a gradual adding of new taxes, increasing of
existing discriminatory taxes over the years as we moved
forward.
Mr. Cohen. Thank you, sir.
I am going to beat the red light, be in the yellow light,
and be better than my Chairman. And I yield back the balance of
my time.
Mr. Coble. I will say to the distinguished gentleman from
Michigan, Mr. Cohen and I have beaten the red light, John. So I
don't want to put a lot of pressure on you, but I recognize the
gentleman from Michigan.
Mr. Conyers. Thank you, Chairman Coble.
I am trying to decide. I have opposed this bill in the
past, and I really think I still do but I am going to look at
it more carefully. I have not had that opportunity.
Ms. Sims, could you take a moment and build up my
opposition to the bill? I mean, what is our best case against
this measure that is before us today?
Ms. Sims. I believe, Mr. Conyers, that basically we go back
to States rights, and I know that sometimes that issue,
depending on what side of the coin you are on, is a good thing,
and sometimes it is a bad thing. But I believe that
fundamentally this whole issue around the ability for us to tax
goes back to States rights.
And I think that we look at this and I have heard in this
conversation where individuals have said, you know, there is
more of a reliance on cell phone services in our neighborhoods
and this is the only source of communication that lots of
people have and that it is going to unfairly impact these
individuals. And I say to that I don't believe that that is so.
I think that we tend to pull poor people out in an argument
because that grabs at the heart strings, but I know for a fact
that individuals who probably should not even have cell phones
in their budgets do. And no one has ever gone to any place to
purchase a phone and said how much are the taxes on this phone.
That has never been the source of the conversation. When they
purchase phones, they look at how many minutes I am going to
get, what the package is going to give me, does it have
Internet access, and what is all of this going to cost me.
So I look at this and say, to be fair to States, we still
should have the right to be able to impose this tax, and I
don't think that at any level Congress needs to get into that
fray. I think that it should be left with States and local
municipalities to determine what their needs are and to be able
to use this as a revenue-generating resource in their
communities.
Mr. Conyers. Isn't the tax in this bill regressive?
Ms. Sims. Is it regressive? I don't believe so, no. Again,
that is part of the argument, and I don't believe that that is
so.
Mr. Conyers. Well, do you not normally oppose regressive
taxes?
Ms. Sims. I sometimes oppose taxes. It just depends on what
that tax is. I don't oppose necessarily--when we look at this,
it is not so much about the tax itself as it is our ability to
do it. Now, we may decide at our local level that this is not
something we want to do, but that decision needs to be made
locally. It does not need to be made at this level. And that is
the entire argument that we have at this point. This is not
going to unnecessarily impact these companies, and I don't
believe, depending on a municipality's or locality's decision
to impose the tax, that is a decision that they need to make. I
don't believe it needs to be made at this level.
Mr. Conyers. Mr. Chairman, can the time that I have
remaining be added to the next Committee hearing when we have
some more time? [Laughter.]
Because I have never ended my time with this much remaining
before.
Mr. Coble. This is a case of first impression for me, John.
[Laughter.]
I don't know how to handle that.
Thank you, Mr. Chairman. I appreciate that.
The Chair now recognizes the distinguished gentleman from
Georgia, Mr. Johnson.
Mr. Johnson. Thank you, Mr. Chairman. I will gladly accept
Chairman Conyers' offer of yielding his remaining time.
Mr. Coble. I figured you might.
Mr. Johnson. And you had about 10 seconds left on yours
also. I would like to have that.
Mr. Mackey, your credibility has been bolstered I think
when you were asked about your former employment which was with
the National Conference of State Legislatures?
Mr. Mackey. Yes.
Mr. Johnson. And you said you had been there for about 10
years? But now you are partner with KSE Partners where,
according to your statement, over the past 11 years I have
worked with major wireless telecommunications providers to
reduce or eliminate excessive discriminatory taxes on wireless
services at the State and local level. You look too young to
have worked for 11 years and before that 10 years with the
State legislatures.
Mr. Mackey. Thank you.
Mr. Johnson. I mean, what was your position with the State
legislatures?
Mr. Mackey. I started with them in 1990 and finished in
2000, and I was the chief economist.
Mr. Johnson. So, yes, you had a job and then you left that
job. Now you are with a lobbying group and you lobby for the
wireless cell phone industry. Correct?
Mr. Mackey. Correct.
Mr. Johnson. I just wanted to clear the table of any
unfairness that may have existed.
But, listen, now Mr. Alford, you heard Mr. Franks who is
the cosponsor of this bill talk about the fact that Congress
has the ability to regulate commerce between the States. You
heard that. Correct?
Mr. Alford. Yes, sir.
Mr. Johnson. And you agree with that.
Mr. Alford. This is interstate commerce, if not
international commerce.
Mr. Johnson. So you agree with the notion that it is
constitutional to have a health care reform bill that requires
people to purchase insurance. Correct?
Mr. Alford. I don't tie those two together.
Mr. Johnson. Do you understand the issue that exists
between the two, one central issue and that is the Federal
Government's ability to regulate commerce? You say that it can
in this context, and I will accept that. Can it also do so in
the health care context?
Mr. Alford. If I see that it can, I would agree with----
Mr. Johnson. Well, have you agreed with it or have you
disagreed with it?
Mr. Alford. I don't accept the concept. We are talking
about mobile devices, and now you are talking about health care
which is a totally different animal.
Mr. Johnson. I am just talking philosophically because Ms.
Sims makes a great point about Federal intrusion into the
affairs of State and local governments.
Now, State and local governments--local government in
particular needs every funding source that it can get to
provide the people who lack resources and who live in
communities racked with crime. They need that money to support
their police departments. Don't they?
Mr. Alford. They need less crime and that is done through--
--
Mr. Johnson. Well, I mean, how are you going to do that
without having a strong police department?
Mr. Alford. It is pretty simple, sir. It is just good
management skills.
Mr. Johnson. Good management skills will keep people from
committing crimes.
Mr. Alford. You don't tax people to death to lower crime.
Mr. Johnson. But what about people who need to call an
ambulance and perhaps the local government has a surcharge on
cell phone use to supplement the 911 set-up so that people can
call and ambulances can come in? Do you think that is a
legitimate use of funds by government?
Mr. Alford. Absolutely.
Mr. Johnson. Well, why shouldn't the local governments have
the ability to utilize that revenue stream to perform that
particular obligation to its citizens?
Mr. Alford. I have no problem with 911 being assessed on
mobile devices, as it is.
Mr. Johnson. But you would support and you would also, Mr.
Mackey, a 5-year moratorium on raising revenues in that way.
Mr. Alford. Yes, sir.
Mr. Mackey. I would just point out that the legislation
does permit 911 fees that are used for 911 purposes to be
outside of the moratorium.
Mr. Johnson. So you think that it is okay for the Federal
Government to micro-manage the affairs of State and local
governments to that degree.
Mr. Mackey. I was just pointing out that 911 fees would be
permitted even if the bill passed because they are excluded
from the moratorium if they are used----
Mr. Johnson. But what about police and fire? What about if
the money goes for police and fire? Would they be grandfathered
in, if you will, under this legislation?
Mr. Mackey. Only the 911 fee purpose.
Mr. Johnson. Only the 911 fee.
And do you think that this bill, Ms. Sims, would become--
though it is a 5-year moratorium, do you think it would pretty
much become a permanent ban on the raising of cell phone taxes
by State and local governments?
Ms. Sims. I think it has the potential to do so, yes.
Mr. Johnson. All right. I have no further questions, Mr.
Chairman. Thank you.
Mr. Coble. I thank the gentleman.
The Chair will now recognize the distinguished gentleman
from North Carolina, Mr. Watt, for 5 minutes.
Mr. Watt. Thank you, Mr. Chairman. I confess the primary
reason I came back was to welcome my constituent, Ms. Bernita
Sims, to our Committee.
Mr. Coble. If the gentleman would yield, I owe you an
apology because I claimed sole possession of Bernita and I
apologize for that.
Mr. Watt. You stole her from me. You stole my constituent.
[Laughter.]
I will have you know that she is the Chairman of the 12th
Congressional District of North Carolina.
Mr. Coble. And I reiterate my apologies, Mr. Watt.
[Laughter.]
Mr. Watt. So you all can see we steal constituents too
around here.
I don't want to get into the global philosophical debate
about taxation or non-taxation or what is covered under the
Commerce Clause or not covered under the Commerce Clause.
As I have expressed to my colleague, Ms. Lofgren, who is
the primary proponent of this bill, below the philosophical
level, there are some real serious problems with the
legislation: some of the definitions of what a discriminatory
tax is; the fact that it covers something called ``mobile
service property'' which means all property used by a mobile
service provider in connection with the business of providing
mobile services ``whether real, personal, tangible, or
intangible (including goodwill licenses, customers lists, and
other similar intangible property associated with such
business).''
It is hard to have that global philosophical discussion
about the Commerce Clause when you are down talking about taxes
on real property, tangible property, which has generally been
the provenance of local communities. And for us to be saying to
local communities that they can't exercise their discretion in
this area anymore is troublesome to me, not just because Ms.
Sims is my constituent and some of her city council people are
sitting in the audience with her. And I just left, when I went
out, to go up and meet with the city council people from
western Salem. But that is troublesome.
It is troublesome to me that a new discriminatory tax is
defined based on ``measured by the charges, receipts, or
revenues from or value of'' various different things. So you
have got a static formula here in this bill that kind of
freezes us at current levels and disregards any kind of
activity going forward into the future. And I think that is
troublesome.
Those are not global issues about whether this is covered
by the Commerce Clause or whether--you know, some of my
colleagues, as Mr. Johnson has pointed out, try to have it both
ways. When it is convenient for them to say something is under
the Commerce Clause, as it is here, then they say it is under
the Commerce Clause. When it is not convenient for them to say
it is under the Commerce Clause, such as they don't want any
intrusion into health care reform by the Federal Government,
then it is not under the Commerce Clause. You know, I don't
know whether it is or is not under their philosophy.
It is hard for me to evaluate these things on this kind of
global perspective. I have to look at the wording in the bill
that is before us, and this bill has a lot of work to be done
on it before I can support it. Ms. Lofgren knows that. I have
had this conversation with her last year. I wish I had been
here for her testimony. I understood she testified earlier.
But I don't really have any questions. I mean, we have had
this discussion--what is this? About the third or fourth or
fifth year in a row? We have had a bill of this kind trying to
do this. And before that, then there was no taxes on the
Internet and no taxes on rental cars and no taxes on something
else. At some point, you have to draw the line and let local
governments have some authority to tax something, otherwise the
claim that the Big Brother Federal Government is a big, big,
big brother becomes a self-fulfilling prophecy because you have
left nothing for State and local governments to tax and gobbled
it all up under the jurisdiction of the Commerce Clause. And
there has to be some kind of limit to that even in the tort
reform area, even in the taxation area.
So we are struggling here to figure out what that
limitation is. I think I heard everybody's testimony except
part of Mr. Mackey's. I never really heard anybody deal with
the exact content of the bill. It was all kind of a
philosophical discussion about this, and I don't think we can
really evaluate a piece of legislation on a philosophical
level. You have got to get down into the nitty-gritty guts of
the language, and that is where my troubles are very heavy.
Mr. Johnson. Will the gentleman yield?
Mr. Watt. I don't think I have any more time to yield to
the gentleman. My red light----
Mr. Coble. The time has expired, and I am told there is
going to be a scheduled floor vote imminently.
Let me say this before I recognize the gentleman from
Illinois. Thank you, Mr. Watt.
Mr. Quigley, did you want to be heard?
Mr. Quigley. No. Thank you, Mr. Chairman.
Mr. Coble. Thank you for coming.
I thank you all for coming.
Let me say this. I came here enthusiastically supportive. I
am still supportive, but Bernita, maybe you may have brought me
around a little bit. But I appreciate very much the testimony
of all three witnesses. As Mr. Watt said, there clearly are two
sides to this.
And in closing, I want to thank the High Point City Council
members and the distinguished city manager for you all being
here and other local elected officials, if there are others in
the audience, for the service that you all do each day.
I have two statements I want to present, without objection,
into the record. One is for the bill. One is against it. One is
from the Speaker of the Minnesota House of Representatives.
[The information referred to follows:]

__________

Mr. Coble. The second is a statement from the Federation of
Tax Administrators. I would like to introduce these into
evidence, without objection.
[The information referred to follows:]

__________
Mr. Coble. Let me thank all of you for being here and
particularly our witnesses.
Without objection, all Members will have 5 legislative days
to submit to the Chair additional written questions for the
witnesses, which we will forward and ask the witnesses to
respond as promptly as they can so that their answers may also
be made a part of the record.
Without objection, all Members will have 5 legislative days
to submit any additional materials for inclusion into the
record.
With that, again I thank the witnesses and those others in
attendance, and this hearing is adjourned.
[Whereupon, at 2:37 p.m., the Subcommittee was adjourned.]

A P P E N D I X

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Material Submitted for the Hearing Record