I was surprised to see my line item for Federal, State and Local Surcharges had gone from .35 to 6.35. When I called MCI, I expected them to say, "That certainly is strange." Instead, three different reps tried to pass it off as a function of a) more long distance calls (from $7.50 to $12.00 -- I don't think so!); b) to the local phone company; c) to the government.

And worst of all, they had zero willingness to do anything to find out why it had shot up by 2000%. Finally, I found someone who said, "You also are taxed for your frequent flyer miles." BINGO! I knew what was going on! They charge .000916 dollars per mile to pay for taxes. It works out to $9.16 per 10,000 miles. Is it worth it? For the 10,000 miles, I think so, but I am out of here once that last 1000 bonus mile is posted.

Isn't it amazing how hard these companies try to get your long distance accounts (ATT with $100 checks, MCI with 10,000 mile awards) and yet they fail so miserably in dealing with their actual customers. All I ask is that I am told upfront what I am getting into. Don't give me some sneaky charges that are explained in some FCC Tariff filed in Washington DC.

I hear that you can tell your local phone company you don't want long distance and then just use the 10-10 dial around services. Maybe that's the way for me.

As for the argument that it's only fair that these companies bill us for what the charges are -- To be consistent with that logic, then we should also be billed for what it cost MCI to buy the miles from USAIR.

By the way, when was this tax implemented and what legislation was passed to enable it? I have read elsewhere on this site that the IRS is not planning to tax mileage awards, but this certainly seems like a tax to me.

As I understand it, all phone companies are
require to pass on the excise tax to their
customer as required by federal law. If so,
it does not make any scent to complain to MCI
for something that they are required to do.

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"?

This topic comes up once every few months. Nobody seems to care that the real villain here is the IRS. Some companies (MCI, Hertz, Delta) will directly pass the tax to customers, others will pass it indirectly to customers.

Maybe we need a new newsgroup devoted to MCI bashing.

If MCI does not give me the miles promised or charges me for it one way or another I will reward them with switching over to Sprint!

$1 per 1000 miles is cheap if you think about it.

If I had access to a bargain like that I wouldn't hesitate in signing up. I'd have multiple telephone lines just for that purpose.

Where else can you get 25,000 miles for $US25?

I feels soooooooooo discriminated against down here in Australia. Stop wingeing , start switching and collect those miles!

cheers Peter

the small print of an AVIS advertisement (AARP, april-99) now says

[This message has been edited by Rudi (edited 05-01-99).]

Still waiting to hear back from them regarding this!

I just got a bill in the mail yesterday for $7+ in excise taxes after I disconnected from MCI. I had goten a $75 credit (Which was supposed to be cash) and got a 1000 mile skymile bonus for using my card. How did they get $7+ in taxes off 1000 miles. What is the excise tax rate on miles? (I don't think it's seven cents a mile)

This is deceptive and pathetic even if it is legal.

What is insane about this tax is:

- I'm a non-US Resident
- I use my calling card to phone the US
- I get sent invoices - seperate from the bill from the credit card for usually 7-8 cents - which it costs them 50 cents to mail.

The stuff they told you about not sending the bill for the miles until after the partner has confirmed credit is nonsence.

But now you've told me I'm rearmed and will be harassing the hell of out MCI about missing miles - which I've paid for!

Many taxes related to travel are charged to non-residents. Its much easier to tax someone who does not vote. Some of these taxes are really getting out of hand. Recently on my 2 day car rental, the taxes on the rental were close to the cost of one day rental.

I agree with pberrett--1000 miles for a dollar is a good deal. However, you're actually paying more than that.
Have you ever used your MCI calling card to place a call? I did last year--quite a few calls, in fact. When I got the bill it was well over $200 and I flipped. I switched from MCI that day and Never went back.
My husband's family lives in Europe. When we called there on MCI, we were paying about 95 cents a minute. Speaing with their customer service (after a 10 minuet wait), I was told that to get lower phone rates, I'd have to switch away from receiving miles.
I'm with AT&T now, not receiving miles, and happy in my phoning. I'm also able to get AT&T customer service on the phone after a minute or so, and no shifty pressing this and pressing that in order to get to a person.

Good grief! I need to learn to spell.

If you can't spell then edit is the next best thing. I edit a lot.