Posts Tagged ‘taxes’

Union group: Amazon should be prosecuted for threatening to pull jobs over per-worker tax

A “union-backed activist group says Amazon should be charged with a crime for its threat to roll back job growth” if the Seattle City Council follows through with a controversial tax idea to assess larger firms a new per-employee tax. “The group, Working Washington, is asking Washington State Attorney General Bob Ferguson to charge Amazon with a Class B felony: ‘intimidating a public servant,’ citing the company’s move to pause some construction and leasing in the city pending the outcome of the vote on the so-called ‘head tax.’…Former state Attorney General Rob McKenna called the group’s prosecution demand absurd, saying the law in question is aimed at protecting individual public employees from personal threat, particularly of physical force.” [Jim Brunner, Seattle Times] More: John Sexton.

Commenter @Living4Winter on Twitter: “It’s so fricken weird when Ayn Rand comes true.” On Monday the Seattle city council voted 5-4 to approve the tax; a final vote will come later and Mayor Jenny Durkan has signaled that she may veto the measure. [KOMO] Update: the council unanimously adopts a tax set lower, at $275 rather than $500 per worker. [Matt Day and Daniel Beekman, Seattle Times]

More: Eugene Volokh with a more thorough First Amendment legal analysis (Working Washington’s theory “would criminalize a vast range of ordinary political action” including “an advocacy group’s threatening to boycott a city if the city council doesn’t change some law that the threatener thinks unjust.”)

April 4 roundup

A tale of targeted property taxes

Congratulations! You may not have realized it was happening, but your municipality has put you in a special revitalization zone which means the property taxes you owe them will quintuple. That’s the message some suburban Maryland business owners got recently, subject of my new Cato piece. Excerpt:

Specialists in local and state government policy are full of ideas for business-by-business and location-by-location tinkering with tax rates, both downward (as part of incentive packages to lure relocating businesses) and upward (to finance special public services provided in some zones, such as downtown revitalization). But there is a distinct value in terms of both public legitimacy and the rule of law in having uniform and consistent taxation that does not depend on whether a property owner or business is on the ins or on the outs with the tax-setting authorities.

March 7 roundup

  • What’s worse than undermining Section 230, charter of Internet freedom? Turning it all into a pinata for trial lawyers [No go, NRO; earlier on SESTA and FOSTA] Carve-out to Section 230 in name of fighting sex trafficking could erode protection for other businesses against being sued [WSJ editorial] More: Karol Markowicz;
  • “If You Owe the IRS Over $51,000, It Can Trap You in the United States” [Brian Doherty, Reason]
  • How far can a theft ring go in stealing a rental vehicle before the police step in? [related Twitter threads, Sharky Laguana and Noah Lehmann-Haupt]
  • “Federalism as a Check on Executive Authority,” panel at Federalist Society 2017 Annual Texas Chapters Conference with Caitlin Halligan, Scott Keller, Ernest Young, moderated by Hon. Jeff Brown [video]
  • Revisiting an auto scare: “Will the Corvair Kill You?” [Larry Webster, Hagerty, earlier here and here]
  • No, peacocks-in-the-airline-cabin isn’t really some failure of “fetishizing [individualism over] communal well-being.” It’s a failure of collectivized legal compulsion overriding contract and choice [David Leonhardt, New York Times; Elizabeth Preske, Travel and Leisure on underlying episode; earlier on emotional-support and other service animals]

Law enforcement for profit roundup

  • “When you find yourself threatening to find more reasons to put even more citizens in jail in order to protect your revenue stream, it’s maybe time to take a step back and think about what you’re doing.” [Scott Shackford on Alabama forfeiture debate]
  • How IRS spent $20 million on debt collection program that generated $6.7 million in payments [Howard Gleckman, Tax Policy Center]
  • “Federal Judge Strikes Down New York City’s Dragnet That Seized Thousands Of Cars Without Warrants” [Nick Sibilla, IJ/Forbes]
  • Prison phone calls and other captive markets: “Stop squeezing prisoners’ families for cash” [Megan McArdle]
  • “The high price of being wrongly accused in Alabama’s ‘monetized’ criminal justice system” [Ashley Remkus, Al.com]
  • “Cop Who Called Asset Forfeiture ‘A Tax-Liberating Goldmine’ Sued for Illegal Traffic Stop and Seizure” [C.J. Ciaramella; Kane County, Ill.]

South Dakota v. Wayfair: can states collect sales tax from out-of-state merchants?

David Post at Volokh Conspiracy has written an explanation and defense of the Supreme Court’s holding, in 1992’s Quill v. North Dakota, “that a State may not require out-of-state sellers of goods or services to collect that State’s sales/use tax, unless the out-of-state seller has some ‘physical presence’ in the State – a retail outlet, warehouse, office, or the like” This term’s case of South Dakota v. Wayfair invites the Court to retreat from that holding. The Quill rule is often criticized for privileging online commerce unfairly over brick-and-mortar, but the contrary rule, says Post, would tend to do the reverse by sinking small online retailers under impossible regulatory burdens. A foretaste of those burdens:

South Dakota’s law, however, does not merely require her [an Idaho woman with a web storefront selling crafted iPhone cases] to collect South Dakota’s sales tax; it subjects her to the full range of South Dakota’s tax and regulatory jurisdiction, including the panoply of South Dakota’s licensing, recordkeeping, and registration requirements, and would, among other things, make her subject to periodic audit by the South Dakota Department of Revenue – which, in many States, requires an in-person appearance before the Revenue Board.

And of course if the Court discards the Quill rule and upholds South Dakota’s law, we can expect other jurisdictions to follow suit.

There are more than 6,000 taxing jurisdictions. Post argues that congressional action is needed, rather than a free-for-all of local taxing power.

Brad Smith: looking back at the IRS targeting scandal

Brad Smith, a former commissioner of the Federal Elections Commission, in the Washington Examiner:

…what we are now seeing is an outright attempt to rewrite history so as to whitewash the entire affair. Newsweek has gone so far as to call the scandal “fake news,” with one of its columnists calling it “a lie.” A Dec. 29 editorial by the Washington Post claims that there was “mismanagement … but not deliberate targeting.”…

The IRS itself eventually conceded that of 199 cases analyzed under this “Be On the Look Out,” or “BOLO” program, approximately 75 percent [150] “appear to be conservative leaning, while fewer than 10 appear to be liberal/progressive leaning groups.” In other words, the fact that the terms the IRS used to pull applications for extra scrutiny — terms such as “Tea Party” and “patriot” — snagged a few liberal groups doesn’t mean that the purpose and effect was not to target conservative organizations.

As the basis for whitewashing the IRS scandal, Newsweek, the Washington Post, and others have turned to a new TIGTA report concerning a different IRS program altogether. That program, called “Touch and Go,” swept up a mix of conservative and progressive groups. But that is precisely because it didn’t target groups based on politics, which was the problem with BOLO. Nothing in the latest TIGTA report contradicts TIGTA’s 2013 report revealing the IRS targeting, and TIGTA doesn’t claim that it does.

Earlier here, here, etc.

Seattle: beverage tax backers on sugar high

The city of Seattle has now put its stiff new 1.75 cents per ounce tax on sugary beverages (text of bill) into effect, and Costco managers in the tech city, much to their credit, have not hesitated to post signs informing shoppers of its impact. According to a reporter’s photo, the sign atop a Gatorade Frost Variety Pack lists the regular Costco price of $15.99 along with $10.34 in newly added Seattle tax for a total of $26.33. Helpfully, an adjacent sign advises shoppers that the same item “is also available at our Tukwila and Shoreline locations without City of Seattle Sweetened Beverage Tax.”

Following KIRO7 News coverage of the story, Scott Drenkard of the Tax Foundation wrote a funny Twitter thread on the positions taken by the various advocates:

  • “First they interview people at the Costco who are rightfully shocked at how high prices on soda and sports drinks are now (they are almost doubled).”
  • “Then they interview a public health advocate who says ‘that’s right! We want these prices to change people’s behavior and slow sales!’”
  • “Then they talk to the consumer, ‘think you’ll change your behavior, maybe even shop somewhere else?’ And she’s like, ‘ya the Tukwila store is close enough.’ Then they ask a city council member if this will hurt local biz, who says ‘there is no data’ suggesting that.”
  • “Then the SAME public health advocate says that people won’t respond to price increases, shopping elsewhere because it isn’t ‘worth their while.’”
  • “You can’t have it both ways people! The tax is either big enough to elicit behavior change, which would slow sales and hurt local biz and potentially reduce calories, or it isn’t. Get your stories straight!”

In 2016 I wrote about Philadelphia’s soda tax that “while all taxes are evaded to some extent, excise taxes are especially subject to evasion based on local geography”, and followed up on the Philly measure’s possible openings for unlawful evasion and eventual public corruption. Seattle authorities intend to use the hoped-for $15 million revenue stream to fund various causes and organizations including an effort to bring fresh fruits and vegetables to urban neighborhoods, even though the once-voguish “food deserts” theory blaming dietary choices on the retail environment has sufferedone debunking after another in recent years. [cross-posted and expanded from Cato at Liberty]

P.S. I used to see this constantly from trial lawyers and their advocates on the question of whether it was a good thing for liability insurance rates to rise reflecting the big liberalization of tort recovery that was going on when I wrote The Litigation Explosion. Higher rates were socially desirable, they would say, because they would expose and discourage dangerous actors, such as incompetent doctors and drivers. There followed a big public reaction when it turned out it was not so easy to pick out bad apples ahead of time and that entire specialties like obstetricians and neurosurgeons were having to pay massive premiums. They then switched to the position that there was no connection between expected future payouts and liability premiums, that the problem was insurance companies being greedy, and that liability insurance rates should be frozen by law.

P.P.S. “Philadelphia implemented a 1.5-cent tax on soda in January of last year. …By August, the marketing firm Catalania found a 55 percent decline in the sale of carbonated soft drinks within the city limits — and a 38 percent jump in stores just outside of Philadelphia. Revenue from Philadelphia’s soda tax has also proven disappointing, coming in at $7 million below projections for fiscal year 2017.” [Christian Britschgi, Reason]

Charles Dickens in Tax Court, courtesy Judge Mark Holmes

Bob Kamman, Procedurally Taxing: “I searched other Tax Court orders and decisions available at the Court’s website. Surprisingly, this is the only reference to Jarndyce. I searched for Dickens. There were petitioners named Dickens, and petitioners with an address on Dickens Street. But the only other Dickens reference came from an opinion by the same Judge Holmes” [U.S. Tax Court Judge Mark Holmes, who has won praise for his writing style]. It was a quote from Tale of Two Cities about oppressive rural taxation:

[The town’s] people were poor, and many of them were sitting at their doors, shredding spare onions and the like for supper, while many were at the fountain, washing leaves, and grasses, and any such small yieldings of the earth that could be eaten. Expressive signs of what made them poor, were not wanting; the tax for the state, the tax for the church, the tax for the lord, tax local and tax general, were to be paid here and to be paid there, according to solemn inscription in the little village, until the wonder was, that there was any village left unswallowed.


[Image from Joseph Hémard’s illustration of the French Tax Code, via Yale Law Library Rare Books Blog]