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Blacks Make the Cell Phone Business

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(NNPA) Major wireless (cell phone) corporations should be conscious of the fact that much of their business and future depends heavily on the African American community. Fortunately, Verizon and AT&T understand this and are heavily involved in our community. T-Mobile will become much better, if the merger with AT&T takes place (AT&T guarantees this). The others should take serious notice with the latest studies now being released.

Wireless communication is an invaluable and increasingly necessary way to do business and stay connected with friends, family, and our local communities. While it seems just about everyone has a cell phone or smart phone these days, wireless use is especially prevalent within the Black community. According to Nielsen, African Americans talk and text on our cell phones more than any other race or ethnicity in the country – on average using 1,300 voice minutes and sending about 780 SMS (text) messages each month.

We’re also increasingly leading the way in how the technology is used. The Pew Research Center’s Internet & American Life Project was released this past August, and it shows African Americans use wireless more than any other ethnic group – to access the Internet, send or receive email, play games, access social networking sites, post photos or videos online, and to bank online. We are also among the most likely to use our cell phones to download an app, play music and participate in video calls and chats with our wireless device.

African Americans of all ages are clearly relying on wireless technology to improve their professional and personal lives, which leads me to an extremely perplexing question: If Black communities are using wireless as a lifeline to connect themselves and to improve our daily lives, then why is such a vital service taxed at such incredibly high (and still growing) rates in this country?

The average American now pays more than 16 percent in combined monthly local, state and federal wireless taxes and fees; and in this age of budget-strapped governments thirsty for revenue, there is a very real threat of that taxpayer burden going ever higher. Often, tax levies are being heaped on us, per device – which certainly adds up for families with children and seniors relying on them, as well as small business owners providing them for their employees. These regressive state and local wireless taxes across the board hit those on fixed incomes, such as seniors, small businesses and our minority community families the hardest. It makes no sense to me how we are discouraging the use of such an important tool by imposing a tax and fee burden that’s at this point more than double that which we pay, on average, in general sales tax (7 percent on average).

Luckily, the U.S. Congress is trying to help taxpayers and consumers alike. It is considering the bipartisan and strongly-supported Lofgren-Franks ‘Wireless Tax Fairness Act of 2011,’ or H.R. 1002, and S. 543 (Wyden-Snowe), which would place a five-year ban on all unfair, new state and local wireless taxes and fees. If enacted, this legislation would be a substantial step in the right direction for establishing a fair and rational tax structure on wireless. The bill was ‘scored’ by the Congressional Budget Office (CBO) at zero additional cost to government, and after being approved by the House Judiciary Committee, it stands ready for a vote on the floor of the full House.

Congress is also considering the bipartisan Smith-Cohen ‘Digital Goods and Services Tax Fairness Act of 2011,’ or H.R. 1860, and S. 971 (Wyden-Thune), which would create a fair, responsible 'national framework' for the state and local taxation of digital purchases – such as songs, apps, E-books, ring tones, video games, movies or TV shows. The legislation would bring tax uniformity to how we purchase such items with wireless/Internet, as right now, multiple jurisdictions can claim tax rights over the items you buy, and you can wind up paying them all taxes for the very same purchase.

Wireless is clearly the leading communication choice of African Americans of all ages to stay connected, and to move our communities forward. For education, employment, healthcare, research and simply navigating our day-to-day lives, accessing the Internet via wireless is something that Black Americans have embraced and then some. We MUST insist that an invaluable resource such as wireless remains affordable and accessible to ALL Americans, regardless of location, race or ethnicity, nor income. Please stand up and let them know you’re watching – let your elected officials at every level of government know that when it comes to wireless taxes, enough is enough. Take a moment to contact your Mayor and City/County Council, your Representative and your Senators, and better yet, contact all the Members of the Congressional Black Caucus in Washington, D.C. today – and tell them these proposed pieces of pro-consumer legislation are important to you and for our country’s future.

Harry C. Alford is the Co-Founder, President & CEO of the National Black Chamber of Commerce®. Website: www.nationalbcc.org. Email: halford@nationalbcc.org.

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0 # Guest 2011-10-29 02:48
As long as taxing authorities conclude that there is sufficient price inelasticity, they will target wireless services for new tax treatment. For entrepreneurs, we may be able to write off these tax expenses. Individuals may want to consider expanding entrepreneurial activity. Finally, what are the positions of the states and localities on these bills? These bills threaten state and local tax revenues and states might collude in some federal court action.
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