How your cell phone taxes help poor people

[Commentary] Every month, Uncle Sam adds a 6 percent tax onto your wireless bill. It's part of an 81-year old program called the Universal Service Fund, and it's likely to get a makeover on June 18. Collecting taxes from wireless bills creates an $8.5 billion fund that the Federal Communications Commission distributes to develop broadband service in rural America and to connect schools and libraries. A third part of the USF, set to be revamped June 18, subsidizes wireless service for poor people who can't afford to pay their cell phone bills.

About 18 million people who are eligible for food stamps and Medicaid receive $9.25 a month for cell phone subsidies through that USF program known as "Lifeline." On June 18, the FCC is voting whether to expand Lifeline by allowing recipients to decide whether to spend that $9.25 on phone service or broadband. With three Democrats sitting on the five-person committee, the new rules are expected to pass. The Lifeline plan is not without controversy, particularly among conservatives because of its $2 billion annual price tag. It became even more unpopular in the wake of a 2012 corruption scandal in which instances of Lifeline fraud emerged. Cell phone providers were found to be enrolling ineligible people into the program.