National Taxpayers Union Seeks End to Gore Tax

(August 19, 1998)  The National Taxpayers Union yesterday restated its opposition to the "Gore Tax," the FCC's schools and libraries program.  It also launched a new website committed to ending the Gore Tax.

The National Taxpayers Union (NTU) is a member based interest group which educates and lobbies elected officials about wasteful government spending and reducing taxes.  NTU President Berthoud testified to the House Judiciary Committee Subcommittee on Commercial and Administrative Law on February 26 about the FCC's use of universal service taxes to fund subsidies to schools and libraries.  (See, copy of Berthoud's prepared statement.)

On August 18 the NTU launched a new website, GORE TAX.COM, committed to ending the "Gore Tax."   The slick site features information about the schools and libraries program, links to news and editorials, and information about how to contact Members of Congress.  It also includes graphics for downloading, which it calls electronic bumper stickers, such as the one at right.

The website can also be used to contribute money, to subscribe to its newsletter -- dubbed "I-rate", and to sign an online petition.

The GORE TAX.COM website promotes HR 4065, sponsored by Rep. Joe Scarborough (R-FL).   This bill, which was introduced in the House of Representatives on June 16, and has over thirty co-sponsors, would suspend collections by the Federal Communications Commission for the schools and libraries program.

Rep. Scarborough is one of the most serious tax cutters in Congress.  In addition to sponsoring this bill, he is also sponsoring HR 3860 (to completely eliminate the capital gains tax after December 31, 2001) and HR 3859 (to repeal federal estate and gift taxes).

The NTU's Gore Tax website does not promote, or even provide information about, the Schools and Libraries Internet Access Act, HR 4324 and S 2348.  This bill is sponsored by Rep. Billy Tauzin (R-LA) and Sen. Conrad Burns (R-MT), and has considerable support from the Republican leadership.  Nor does the website address Rep. Sensenbrenner's bill, HR 4032, which would delete the subsections of Section 254 of the Telecommunications Act of 1996 pertaining to the e-rate.

The e-rate is a new program which is scheduled to provide subsidies to schools, libraries,and rural health clinics for various telecommunications services and computer networking equipment.  It is currently based upon the 1996 Telecommunications Act.  Section 254 of that Act codified the long standing practice of providing "universal service" support for telephone service in high cost rural areas.  However, the Act also included a subsection which extended universal service support for any school, library and rural health clinic.

The regulatory agency with responsibility for implementing universal service, the Federal Communication Commission, issued an Order on May 8, 1997 which expanded universal service support for schools, libraries, and rural health clinics to include various types of networking hardware, including hubs, routers, network servers, and cable.  It set an initial level of funding at $2.25 Billion per year.  In June, the FCC reduced the subsidy level to $1.275 Billion for1998.  The FCC ordered that the subsidies be collected from long distance phone companies, who would in turn to recoup the costs from their customers.  The FCC created the Schools and Libraries Corporation to administer the program, subject to FCC control.

The NTU and other critics of the program call it the Gore Tax, because Vice President Al Gore has been instrumental in its creation, and often claims credit for connecting schools to the Internet.  Ira Fishman, the CEO of the Schools and Libraries Corporation, formerly raised money for Gore.

In a related matter, Ira Fishman announced last week that he will step down on August 28.  Fishman's interim replacement at the Schools and Libraries Corporation will be Chief Operating Officer Kate Moore.

The National Taxpayers Union (NTU) describes itself as "a 501(c)(4) organization founded in 1969 to fight for the American taxpayer. NTU is the largest grassroots taxpayer organization with more than 300,000 members across all fifty states. NTU lobbies Congress and state legislatures, educates politicians and the media on important taxpayer issues and teaches its members how to become effective, united citizen lobbyists."

The NTU works for "Constitutional amendments to curtail deficit spending and restrict tax increases, lower taxes for all people, taxpayer rights, eliminating wasteful and inefficient government spending, reducing spending, bureaucracy and regulation at all levels of government, and accountability for our elected officials."