03.01.10

Haircuts for job hunters?

I can think of no stronger an argument to the average person for sweeping United States tax simplification and reform than this video (a variation of which I saw while watching the Sugar Bowl on New Year’s Day — a game which, to be honest, was almost sickeningly boring after the first half):


Is a haircut a job-hunting expense?

Do you know the answer to the question the video poses under the current tax system? Answering the question is left as an exercise for the reader; it’d take me more effort to find out the answer than I’m willing to make. Good luck reading IRS documentation to figure out the answer! (Food for thought: which segments of society are most likely to know or learn about, and take advantage of, this deduction, particularly given that it requires itemizing deductions, among other restrictions? What classes of society benefit most and least?)

It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.

James Madison, The Federalist No. 62

Instead, consider the answer under the far simpler Hall-Rabushka flat tax, occupying a single postcard-sized form (plus one for your company if you’re self-employed): the question is meaningless. Whether you get the haircut for personal pleasure or for job-search reputability, it wouldn’t affect your income tax in the slightest. More generally, an individual’s income taxes under the flat tax don’t depend at all on how he spends his money. (See Section 202, referencing Section 201 and Section 101; the law’s text, also linked from the above page, fits in seven nearly pocket-sized pages, so it’s easy to navigate it and only slightly less easy to understand its requirements. Analysis and understanding of its rationales is more difficult but is well within the grasp of an intelligent taxpayer with a numerical bent.)

In the meantime, Congress, please keep preserving the existing tax system and even making it more convoluted, complex, and distortionary — taxpayers love you for it!

13.03.09

Nanny state watch: Scottish edition

I generally take a dim view of laws and regulations intended to protect people from themselves. I believe that responsibility for a person’s health and well-being ultimately resides with that person; a person who engages in risky or dangerous behavior must accept the consequences of his actions. Society should not take that responsibility and allow the misdoer to derive advantage without concomitant disadvantage. That way lies moral hazard, a phenomenon with which all discerning members of society should be familiar (and of which they should be justifiably wary) through the economic news and events of the last year or so.

In that vein I direct your attention to the latest attempt to extend the nanny state: a Scottish tax on chocolate in a proposal defeated by only two votes in a meeting of the British Medical Association. Dr. David Walker, its chief proponent, says:

“Chocolate has lost its status as a special treat and I think that if we charged a tax on it then, over a number of years, we could restore that status.”

He had earlier told the BBC news website that obesity was a “mushrooming” problem, and Scotland risked heading the same way as the United States.

He added: “There is an explosion of obesity and the related medical conditions, like type 2 diabetes. I see chocolate as a major player in this, and I think a tax on products containing chocolate could make a real difference.”

There is much that is wrong with this from economic and personal freedom standpoints. However, in the interests of concision and minimal scope, I will limit myself to taking issue with these later lines in the story, also from Dr. Walker:

“After eating a bag of chocolate sweets you would have to walk continuously for three hours to burn off the calories consumed.

“It is simply not enough to say people should get more exercise.

The regular reader will know that last year I completed a thru-hike of the Appalachian Trail. Backpacking requires a tremendous amount of energy (moreso for a trip of that length and duration), and I fueled myself using a variety of methods: gorp, granola bars, beef jerky, and candy, among others. For roughly the last 1300 miles of my hike, my primary fuel between meals was the large or king-size candy bar — usually Snickers for its high calorie-to-weight ratio but often Milky Way or 3 Musketeers for an attempt at variety. A large Snickers bar contains 280 calories, while a king-size bar contains 510 calories; Milky Way clocks in at 260 and 460 calories respectively.

Each day while thru-hiking I typically would eat the equivalent of five, six, or more large-size bars (ten is the maximum count I can remember, although I probably exceeded this when completing the Four State Challenge) while hiking twenty to thirty miles daily. (NB: my chocolate bar rate of intake effectively dropped to zero when I finished the hike.) Dr. Walker would likely agree that this rate of intake in this exceedingly unusual situation is much less likely to be harmful than it would be for an average person and situation, but if he did not, I could assure him with absolute certainty that while I was hiking this prodigious consumption of chocolate was in no way calorically harmful. Further, in the four months since I completed the thru-hike I have noticed no other lasting ill effects. Indeed, it was necessary to travel those distances without courting malnourishment and unhealthy weight loss; I have heard of thru-hikers who could not carry enough food to avoid losing weight in the final stages of their thru-hikes (at which point all discretionary weight would have long since disappeared). Would Dr. Walker punish me for what it was necessary for me to consume while hiking? A chocolate tax across the few hundred bars I likely consumed would have summed to a meaningful value — perhaps a couple handfuls more candy bars or a small meal in a town I passed through.

Dr. Walker may be right that for most people more exercise cannot adequately combat excessive chocolate intake. However, that his assertion is only usually right means that sometimes it is wrong; it is a clear example of the folly of not recognizing personal responsibility to avoid harmful choices. If this tax were real, the people who consume chocolate in moderation with respect to their situations (I include myself in this group) would only be harmed, while the ones who consume to excess, perversely, have an incentive to consume even more as they can take advantage of the newly-funded programs “used by the NHS to deal with the health problems caused by obesity” without paying the full costs to use them.

If Dr. Walker wishes to see more healthy intakes of chocolate, he would do better from a personal freedom standpoint to improve educational efforts that warn of the dangers of excessive sweets, which would neither inhibit individual responsibility nor tax the responsible chocolate lovers to pay for care for the gluttonous ones.