Wicker: Democrats’ Reckless Tax Will Hit Americans’ Phones

“This Makes the Democrats’ tax proposal not only an economic security issue but a national security issue as well.”

August 3, 2022

WASHINGTON – U.S. Senator Roger Wicker, R-Miss., ranking member of the Senate Committee on Commerce, Science, and Transportation, today released the following statement regarding the Democrats’ recent tax and spending reconciliation package:

“The Democrats’ latest massive tax and spending spree threatens Americans in many ways—with rising costs, inflation, and tax increases—all in the midst of a recession. Yet there is another impact that may not be as obvious but could be just as destructive: a tax on wireless innovation, which could stall our nation’s progress in the race to 5G.

“The ‘book minimum tax’ included in the Democrats’ proposed bill would create a 15 percent corporate tax. This would not only reduce the GDP and kill jobs, but would disproportionately punish American wireless carriers who have invested heavily in resources to fuel connectivity and build state-of-the-art networks. Wireless carriers have spent hundreds of billions of private-sector dollars on spectrum assets—the radio waves that are the lifeblood of wireless networks. The book minimum tax would apply retroactively and prospectively to those purchases, diverting billions of dollars intended for future investment. This tax could have the impact of reducing future spectrum auction revenues, since carriers would be forced to account for the extra 15 percent cost in every bidding decision. Providers would likely be forced to pass on this increased tax burden to consumers through higher monthly bills—the last thing Americans need in this economic climate. 

“Americans use their mobile devices for everything from communicating with loved ones to accessing critical resources like telehealth, education, and public safety. Congress recently made a historic bipartisan investment in bridging the digital divide and providing low-income options to connect all Americans. This proposed tax threatens to undermine those efforts. It would increase costs for an industry that should be investing capital in physical infrastructure to connect millions but will instead be forced to subsidize this reckless spending spree.

“No other country in the world has instituted a tax on spectrum. China is working to undermine the United States as it seeks to dominate 5G and next-generation wireless technology. This makes the Democrats’ tax proposal not only an economic security issue but a national security issue as well.

 “At a moment when consumers are facing rising costs in nearly every part of their daily lives, Democrats are planning to tax 5G as well. The book minimum tax would harm investment, threaten American leadership in next-generation networks, and raise costs. This would be a huge step backwards in the effort to connect all Americans to reliable, high-speed networks.”