President Barack Obama will urge Congress to repeal a law requiring workers to pay taxes when they use employer-provided cell phones and similar equipment for personal reasons, a Treasury Department official said.
The reprieve, to be included in Obama's budget outline Feb. 1, is a victory for companies such as Little Rock, Arkansas- based Alltel Corp., Dallas-based AT&T Inc., Overland Park, Kansas-based Sprint Nextel Corp., and New York-based Verizon Communications Inc., which have complained the 20-year-old requirement was outdated.
The budget proposal would end the need for employers to keep detailed records when company-owned cell phones, BlackBerrys or similar telecommunications equipment are used for both business reasons and the personal convenience of employees, the official said. Current law, which is rarely enforced, requires employees to pay income tax on the value of any personal use.
Highly commendable. My dear friend and UCLA law colleague/tax professor Bill Klein is always telling me that there are three criteria for a "good" tax law: fairness; simplicity; ease of administration. Current law would seem to violate at least the last latter two principles, since it's costly for businesses and employees to compute and difficult to enforce. Plus, it would seem to encourage evasion, which promotes a sort of scofflaw attitude that undermines the largely voluntary system of taxation.
Credit where credit is due. Good move by Obama.