The Obama Administration’s desperation for new revenue to feed its massive spending appetite is becoming more apparent every day.
The latest tax hike proposal, this time from the IRS, is to tax 25 percent of the value of employer-provided cell phones or Blackberries.
The rationale is that workers use employer-provided phones to make or receive personal calls, and Blackberries to send and receive personal emails. As such, they should pay taxes on the value of these personal usages, because they are a form of income.
It is unclear how the IRS determined that 25 percent of cell phone and Blackberry usage is personal.
A law from the 1980s already on the books requires employees to pay taxes on their use of employer-provided cell phones unless they can document that their usage of the phone is for work only.
The IRS has never collected this tax, however, most likely because of its high cost of enforcement. Collecting the tax now will not be less complicated.
What’s next? Maybe a per-cup tax on office coffee, or targeting furtive visits to ESPN or Hulu on the office PC? As one wag put it on the Journal’s web site, ‘It’s like charging for the use of the company washroom.’
Employees get company cell phones and Blackberries for the convenience of their employers to contact them any time day or night. And they increase efficiency because workers can be in contact with the office and co-workers at any time, from anywhere.
Levying a tax on cell phones and Blackberries will lower efficiency, because workers unwilling to pay the new tax will stop accepting them from their employers.
Congress should put a stop to this tax hike on workers and cut spending to make similarly frivolous revenue grabs unnecessary.