- Mark your calendar now for Cato’s Constitution Day September 17 with a star-packed program (plus me) [register; Facebook event]
- “Cato Did Remarkably Well at the Supreme Court” with an 11-3 record this term [Ilya Shapiro]
- Cakeshop crumbs: “The Scope of the Masterpiece Cakeshop Decision Will Be Determined by the Concurrences” [Erica Goldberg] “Does Masterpiece Cakeshop’s Easy Inference of Hostile Intent Overturn Employment Division v Smith?” [Rick Hills] Plus: thoughts from Prof. Michael McConnell [Volokh] and from Douglas Laycock and Thomas Berg as part of SCOTUSBlog’s symposium on the decision;
- South Dakota v. Wayfair: Court approves state sales tax collection from out-of-state vendors [Caron/TaxProf first and second link roundup, Trevor Burrus and Matthew Larosiere, earlier]
- Ohio v. Amex: divided Court lays out antitrust principles for transaction platforms [Beth Farmer, SCOTUSBlog; Eric Fruits, Truth on the Market; Diego Zuluaga (“Don’t Blame American Express for the Plight of the Poor”)]
- Animal Science Products v. Hebei Welcome Pharmaceuticals: Court considered question of deference allowable to foreign law and we didn’t have a culture war about it [Amy Howe, SCOTUSBlog; Cassandra Burke Robertson and Stephen Sachs, Prawfs]
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.”)
- “Former employee of red light camera company that bribed Chicago official (who is now serving 10 years) turns informant, seeks sizable cut of the $20 mil the company paid to settle the city’s suit. Seventh Circuit: The chutzpah!” [John K. Ross, Short Circuit, on City of Chicago ex rel. Rosenberg v. Redflex Traffic Systems Inc.]
- “Why Religious Organizations Shouldn’t Lose Tax-Exempt Status Based on Public Policy, Post-Obergefell” [Sally Wagenmaker via Caron/TaxProf]
- The regulated American truck operator: “For the liberty minded professional driver, the situation looks bleak.” [“Gordilocks,” Glibertarians]
- Practice pointer: don’t make closing argument in a condition that could score .337 on a Breathalyzer afterward [Mike Frisch, Legal Profession Prof; Jefferson County, Ky.]
- Not a total shocker: study finds student editors at law reviews tend to accept articles matching their own ideologies [Prof. Bainbridge]
- Per a United Nations expert, 1) adopting fiscal austerity programs may put countries out of compliance with international human rights; 2) to remain in compliance, countries may be obliged to undertake crackdowns on financial privacy meant to extract more taxes. Oh, international human rights, how elastic thou art [Office of High Commissioner for Human Rights, U.N.]
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.
- 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]
- “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.]
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, 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  “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.
THEY ARE NOT MESSING AROUND WITH THE NEW SUGAR TAX IN SEATTLE pic.twitter.com/xqmj7940y2
— hayden ? (@HaydenBedsole) January 5, 2018
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.”
- “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]
“Wyoming has the most freedom from paternalism, while New York is the most paternalistic state.” 50-state survey [Russell Sobel and Joshua Hall, Mercatus Center] From: “For Your Own Good: Taxes, Paternalism, and Fiscal Discrimination in the Twenty-First Century,” new Mercatus book on sin taxes edited by Adam Hoffer and Todd Nesbit.