Contact: Robert E. McLean
703-418-0390
bmclean@mailers.org
www.mailers.org
Postal Facts: Taxes Do NOT Pay for Postage,
and Haven't Since 1982
The United States Postal Service is a self-supporting government institution and an essential partner for American businesses. The Postal Service operates on funds it collects from mailers for postage-not on taxpayer dollars. In fact, the last year the Postal Service received a public service appropriation was FY 1982.
The only postal appropriations Congress authorizes subsidize a select group of mailers (including Members of Congress). These funds, called "revenue forgone," pay for free mail for the blind, overseas voter registration and congressional franking privileges. Congress eliminated the nonprofit postage subsidy in 1993, phasing out the appropriation from 1993 to 1998.
Congress owes the Postal Service millions of dollars for the reduced postage it mandated for nonprofit mailers, and for which it was to appropriate funds. This appropriation will be repaid in equal installments of $29 million a year over 42 years, covering FY 1994 through 2035.
Stamp Taxes: $14 Billion in Additional Costs
During the last two decades Congress often used the Postal Service as a means of collecting money to help reduce the national deficit through "stamp taxes." Legislation approved by Congress and the Reagan, Bush and Clinton administrations has cost American businesses and consumers $14 billion:
- 1985 Omnibus Budget Reconciliation Act (OBRA) made the Postal Service responsible for health benefits for postal annuitants retiring after September 30, 1986. Cost: $329 million.
- 1987 OBRA required the Postal Service to pay for annuitants' health benefits and cost of living adjustments (COLAs) during fiscal years 1988 and 1989. Cost: $780 million.
- 1989 OBRA required the Postal Service to pay for retiree COLAs retroactive to 1986. Cost: $74 million.
- 1990 OBRA revised the previous OBRAs, making the Postal Service responsible for all health benefits and COLAs for all retirees since 1971. Cost: $12.31 billion .
- 1993 OBRA required the Postal Service to pay additional money for these benefits to correct mathematical errors in the 1990 OBRA. Cost: $1.041 billion.
The Mailers Council opposes any further attempts by Congress to use the Postal Service as a source of stamp taxes. A typical postage increase may only mean an extra penny to an individual paying a bill or mailing a greeting card, but for businesses the increases amount to thousands or millions of dollars a year in added annual expenses.
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