Quiggly Museum of Tax Oddities
|January 9, 2007||Posted by Staff under Banneker, Progress Report, The Progress Report|
Museum of Tax Oddities
Hey, we’re an award-winning museum!
Stroll with us down the hallway to the first display case….
A toupee! Not any old toupee, however. This one is Exempt from the State Sales Tax! Yes, in Maryland the hairpiece industry lobbied for, and received, a special exemption from state sales tax. Any economic justification for that? Any moral justificiation for that? Ah, but the toupee-makers applied political pressure. This teaches us that allowing special exemptions to a tax is a bad idea, because every special interest winds up lobbying for its own special treatment. Better not rely on the sales tax, which is so easily corruptible.
Next item: a bunch of chains. Slavery is a great evil, but it could be even worse — the government could penalize people for setting their slaves free. In the Roman Empire, the Senate levied a manumission (freedom) tax on owners who let their slaves go, ranging between 2 and 5 percent of each slave’s value.
Next item: a house with no windows.
Looks kind of unpleasant, and indeed, people who lived in these houses were more likely to get diseases and die due to the lack of light and ventilation.
So why did anyone live in such houses, thousands of them, in many locations in Western and Central Europe? Because some idiots decided to impose a tax on windows!
One can still find some window-tax houses standing today, silently testifying to the tax stupidity of some people. Remember: people react to taxes, they don’t just pay them automatically! Fancy monarchs and highly-trained bureaucrats failed to realize that window taxes meant fewer windows. Don’t ever make that kind of mistake.
Now look over here, at this tree stump. It used to be a fine date tree, but then Pasha Mehemet Ali decreed a tax on all date trees. Just like a plague, the tax caused trees to fall. With the tax, they were worth more dead than alive.
This special exhibit plaque is on loan from the National Museum of Audacity. You see, in the Tax Reform Act of 1986 — you remember, the one that was to make federal taxes simpler and fairer for everyone — there appears this clause: “In the case of any pre-1987 open year, neither the United States nor the Virgin Islands shall impose an income tax on non-Virgin Island source income derived from transactions described in clause (ii) by one or more corporations which were formed in Delaware on or about March 6, 1981…”
Two investigative reporters for the Philadelphia Inquirer provide us with this translation: A man named William M. Lansdale, a pal of Ronald Reagan and California’s then-Governor George Deukmejian, wouldn’t have to pay Uncle Sam about $4.5 million on some investments.
Although Lansdale is far from unique, it’s impressive how politicians never resist trying to sneak things like this past the citizens.
New Item — Peanuts. Here’s how Doug Brown, writing for Interactive Week in March, 2000, put it:
It’s hard to be a peanut. If you’re a peanut and you bow to state governments for some sense of being, life as a humble legume will be schizophrenic. If you’re a raw peanut, five states would require that sales taxes are paid upon your purchase. If you’re roasted, 11 states charge a sales tax. Add some honey to that roasting, and now 21 states say you’re taxable. Get drenched in caramel and mixed with caramel-coated popcorn and suddenly you’re a “snack,” and 31 states will call in the tax man. What’s a peanut to do?
Build Your Own Tax Policy!
Free interactive experiment. Award-winning and educational.
Visit the Museum’s new wing, the Hall of Ancient Relics!
Help to find new exhibits for the Museum. Dr. Quiggly asks humbly that you E-Mail your suggestions to him.