Cellular phones no longer a luxury to be taxed as such

Remember the "luxury tax"?

The idea is understandable -- anyone who can afford luxury items like furs, cars, yachts, private jets and jewelry probably won't bat an eye at a few extra dollars.

Congress bought the argument, enacting such a tax in 1991, signed into law by President George H.W. Bush.

The government estimated it would raise $9 billion in excess revenues over the next five years.

You might remember how that turned out.

Congress never waited to see what would happen in five years. The money didn't materialize, and people employed in manufacturing, selling and maintaining cars, planes and yachts lost their jobs.

In 1993, the luxury tax was eliminated, although it stayed in place on cars for another 13 years.

At one time, cellular phones were considered a luxury. We remember running a story about one of the first automotive "bag phones," owned by an attorney who was later disbarred for stealing client funds.

But cellular phones are no longer a luxury -- many people living hand-to-mouth rely on them as their sole electronic connection to the outside world, and they're even available through government subsidy to the elderly and economically disadvantaged.

But vestiges of mobile phones' luxury status remain.

Nebraskans, for example, pay the second-highest state and local taxes in the United States on their cellular phone service, 18.48 percent, according to a study by the Tax Foundation. Check it out here http://bit.ly/1wPWWVK

Washington State pays the highest, 18.6 percent, Oregon pays the lowest, 1.76 percent.

In recent years, McCook city officials proposed imposing a tax on cellular phones and doubling the tax on land lines. After citizens objected, however, the city backed off, leaving cellular phones alone and cutting the landline tax from 3 to 1.5 percent.

The "Lifeline" system to provide phones to the needy has drawn fire for being too loosely applied for ineligible people, and some providers have run afoul of regulators. Like all such programs, that subsidy must be watched closely to eliminate waste and fraud.

Today, those in the lower rungs of the economic ladder rely on them more than those with more resources. The time when a cellular phone was a luxury are long gone, and so are the days when a luxury tax is appropriate.