While I'm no CPA (nor do I play one on TV), experience has shown me that the Feds, particularly the Dept. of Extortion doesn't care who is paying for something, so long as someone is.

When Congress chooses to tax, they greatly prefer indirect taxes (corporations) over direct taxes (income). It makes for a less hostile crowd back home.

Of course only an idiot thinks that companies simply pay these taxes from profits rather than passing them off to the customers. However logic does not penetrate politics easily.

My point? Congress would much rather tax miles a company awards (indirect) over raising the Federal Tax rate on long-distance calls. So if your tax burden on your phone bill (or anything else that itemizes tax) jumps up, look at the company's policies and procedures before assuming the Dept. of Extortion has changed its policies.

Yes, Excise Taxes must be paid by the consumer, but what would stop, for example, MCI from passing along its corporate tax burden DIRECTLY to customers under the guise of "Federal Tax"?