As a matter of federal tax policy, I oppose permitting deductions for state taxes. I would rather see lower federal rates across the board, and let the full impact of state taxes rest on the residents of the states that have high taxes, rather than have the entire nation subsidize a quarter or more of the tremendous tax rates paid by New Yorkers and Californians, thus reducing the pain of higher state taxes and allowing local politicians to escape the political consequences of profligate spending (not to mention preventing tax-cutting state politicians from realizing the full benefit of their policy).
But come April, I promise you that on my 1040 Schedule A, I’m going to deduct the thousands of dollars of state income tax I paid and collect the resulting refund. Does this make me a hypocrite? Of course not: it just means that I’m not an idiot.
I’m not arguing that people shouldn’t take deductions that are available to them; I’m arguing that the deduction shouldn’t exist. Self-flagellation on my taxes doesn’t make me any purer or my policy arguments any more correct, it just means that I suffer all the costs of a tax policy I oppose without realizing any of the benefits.
Cyrus Dugger, however, makes precisely this mistake when he criticizes a reformer for being a plaintiff in a lawsuit as a “hypocrite.” (Or, more accurately, thoughtlessly parrots the West Virginia Trial Lawyers Association’s accusation of hypocrisy.) That one argues that the law should be changed for the good of society doesn’t at all require that one refuse to take advantage of a bad law. There’s no requirement that reformers who find themselves in the situation of being plaintiffs abstain from receiving legally available non-economic damages. Reformers aren’t arguing that individuals are bad people for seeking non-economic damages, but, rather, the legal system’s award of unlimited non-economic damages is bad public policy. (For that matter, it’s far from clear that Stephen Roberts is even seeking non-economic damages above and beyond the cap he proposes—I have seen no one make that accusation.)
Similarly, Senator Trent Lott, an occasional reform supporter, sued his insurance company over Hurricane Katrina damage, seeking to rewrite the terms of the insurance contract that he agreed to, and using his power as a Senator to threaten the industry as a whole because State Farm refused to give him special treatment. However, the only thing Dugger can think to find wrong with Lott is “hypocrisy.” It strikes me that hypocrisy is the least of Lott’s sins compared to bringing an illegitimate lawsuit and abusing his authority as a Senator to punish the nation’s economy in order to seek personal gain for himself and his trial-attorney brother-in-law.
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Along the same line a politician who is for term limits should not hesitate to run for re-election as long as there is no law preventing this. His opponents would only gain from any decision not to run again.
This is an interesting debate. (Well, as the first poster, I guess it’s not a debate just yet!)
I agree that a person wanting to revamp the current tax system but who still uses the current tax system could not really be a hypocrite. If that person ignored the current tax system he’d be arrested on a charge related to tax fraud.
But think about a slave owner who lives in a country where slavery is legal. That slave owner is utterly and complete against laws regarding slavery. He thinks slavery is immoral, bad for the economy, and that no one should ever own a person. However, he keeps his slaves. In that instance I would think he would be a hypocrite.
The difference being that in relation to the tax code, a citizen is under a duty prepare and file his taxes accurately. That means taking applicable deductions.
However, owning a slave is not required. Thus, the only thing keeping the hypothetical slave owner from giving up his slaves is himself. He would be completely free to take his slaves to a jurisdiction where they’d be free and let them go. The fact that he’s trying to take away the right to own slaves away from other people but refuses to do it to himself is hypocritical.
Now, moving on to the real topic at hand, does wanting to revamp the current civil judicial system and still filing civil lawsuits make a person a hypocrite? Not necessarily.
No one, that I know of at least, wants to entirely scrap the civil judicial system. At worst (or at best) some people want to fix various problems to make the system better. Where is the hypocrisy in using the system you want to fix?
But someone could still be a hypocrite in such a circumstance. As even the original poster agrees that Senator Trent Lott would be a hypocrite for his stance against frivolous lawsuits and his filing of a frivolous lawsuit.
What I find interesting is the point behind all of this. Does the person raising the hypocrisy seriously believe that this is evidence that the system does not need reforming? To me the fact that the system is so corrupt that even foes of the system are milking it could only be evidence that the system does need reforming.
The slave-owner example isn’t quite analogous. There, the slave owner thinks that the act of slave owning is immoral, so he is behaving in a manner that he purports is immoral. That’s not the case for the tax or liability reformer who takes advantage of the status quo even as he or she seeks to change it. If Roberts had at some point made the argument that the very act of asking for non-economic damages was immoral, one could fairly accuse him of hypocrisy for seeking non-economic damages, but I haven’t seen anyone indicate that he has done anything other than argue for a cap on public policy grounds.
Fish misses the point on Lott. Whether or not Lott is a hypocrite, it pales in comparison to his actual sins. Lott’s actions wouldn’t be any less odious if he had been a consistent reform opponent during his Senate career.
As for why Dugger is making the argument he is making, one would have to ask him.
“The slave-owner example isn’t quite analogous.”
I agree they are not analogous. That’s exactly what I meant when I wrote, “The difference being…”
“Fish misses the point on Lott…”
What point did I miss? I think he’s a hypocrite. You think he’s a hypocrite. We both agree he’s a hypocrite. The fact that he’s guilty of far worse things is completely irrelevant to whether he’s a hypocrite.
I think you missed my point. What difference does anyone being a hypocrite make in the debate on whether the civil judicial system should be reformed?
My point is that that such hypocrisy is only proof that the system does need to be reformed. Is that no longer the focus of overlawyered.com?! The fact that some people are using this hypocrisy against the reform movement is simply ludicrous.
Ted’s point is worthwhile, but defending Lott and the WVa Chamber of Commerce guy is a tough row to hoe. It’s too juicy a target for the anti-reform side not to take a shot. I don’t blame ’em.
But if Dugger wants hypocrisy, he should take note of how, for instance, a certain high-profile securities strike-suit firm is reacting to coming under indictment itself.
[And for kickbacks, no less. NB that I’m not defending Lott; I view Lott’s actions as scandalous, and the lack of reaction to them even more scandalous. I don’t see any indication that the WVCC head has done something wrong, however: he’s suing the responsible parties who injured his daughter, not the BB-gun manufacturer, for example. — TF]
no, you actually ARE a hypocrite if you deduct your state taxes on the federal tax form.
and i don’t care what nuance you are making when saying that the tax deduction should not exist. what ever happened to “put your money where your mouth is”? i wouldn’t call you an idiot for not taking the deduction, i would call you a principled individual.
Hypocrisy is the act of pretending to have virtues that one does not actually have.
I don’t claim that people shouldn’t take the Schedule A deduction for state taxes; I don’t even claim that plaintiffs shouldn’t claim non-economic damages available to them (though I certainly admire those who make that sacrifice). I argue that the government shouldn’t offer deductions for state taxes and that the legal system should not award unbounded non-economic damages. There’s no inconsistency there, much less hypocrisy.
Randy is simply wrong.
Let’s remember that Trent Lott is “tort king” Dickie Scruggs’ brother-in-law.
randy,
Here’s an example of non-hypocrisy (such as what Ted is doing).
Let us say that Arnold is a bodybuilder (name chosen at random – heh).
Arnold’s boldybuilding league (which holds the competitions) allows steroids.
Arnold thinks they shouldn’t. If Arnold doesn’t use steroids (and th others do), HE WILL LOSE.
On the flip side (they don’t allow, and he thinks they should), if he DOES use (and gets caught), he will be disqualified (he will lose).
In our tax system (and business in general), one must play by the rules or lose (or not get caught). Advocating for a CHANG to those rules dosn’t man you shouldn’t play by them until you get them changed.
Now, if you’re talking about a MORAL issue (such as, in the example above, claiming steroid use is morally wrong), THEN you would have a hypocrisy charge.
“The difference being that in relation to the tax code, a citizen is under a duty prepare and file his taxes accurately. That means taking applicable deductions.”
Actually, this isn’t quite right either. You have the duty to file a tax return and you are entitled to take certain deductions, but that doesn’t mean that you must. What you must ,not do is take deductions to which you are not entitled. In the first case, not taking a deduction you are entitled to, the Treasury benefits at your expense. I’ve never heard of the IRS prosecuting someone for overpaying their taxes and I’m sure it will be a very long time before I do.
Jonathan is correct. (Indeed, I have avoided a number of deductions over the years to reduce the risk of the hassle of an audit, effectively paying more in taxes as insurance.)
I am not making the point that Fish and Deoxy are claiming I’m making about the tax system. It’s not that I’m required to take the deduction; I could refuse to do so, as randy states, and simply overpay my taxes. I’m arguing that there’s no point in me punishing myself and paying more taxes by refusing to take a deduction that I think is bad public policy for the government to offer and that I am not being inconsistent or hypocritical in doing so.
Ethics comes from the dynamics of human interaction.
Some decades ago someone found that a relative of Govenor Hugh Cary was cheating on sales taxes from Long Island gas stations. Subsequently it was found that all the gas stations were cheating. The econmics of selling gasoline implied that you could not be the only honest guy. There were two stable states for the dynamic: everybody is honest or everybody cheats.
A terrific benefit of a reasonable rule of law is that citizens are allowed to be honest at great benefit to all.
Without slaves the plantation system of the 15th through 19th centuries could not work. It was very difficult not to be a hypocrit with respect to human rights. It took a change in law to rid us of slavery.
OK, here’s one last example, and I think it’s better than any of the others so far:
Basketball.
In basketball, there was once no shotclock. Some people advocated adding the shotclock. If I were advocating the addition to the shotclock, would it be hypocritical of me not to act as if a shotclock were already in place?
No. Duh.
Advocating a change to the rules doesn’t mean one should act as if the rule you want changed has ALREADY been changed.
Hypocrisy applies to ETHICAL/MORAL issues – that is, systems where you are claiming what the ethical/moral rule IS, not what it is should be.