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!

22.12.08

California: a bastion of sanity

(Pre-emptive snarky notice: nothing Mozilla-related here, so if that’s all you care about, scram. 🙂 However, if you’re a non-Californian who enjoys the occasional dash of schadenfreude, even moreso if your local political unit is fiscally responsible, read on.)

Two quick news stories in California crossed my field of view in the past few days which I found, er, interesting, to say the least.

First, if you ever happen to visit California and I happen to be in a car crash while you’re present, do not under any circumstances move me out of the car if you think the car might explode. If you did, you’re liable for any harm that might cause me, and I might be able to find a convenient excuse to sue you for lots and lots of money. The relevant section of law (1799.102) is below:

1799.102. No person who in good faith, and not for compensation, renders emergency care at the scene of an emergency shall be liable for any civil damages resulting from any act or omission. The scene of an emergency shall not include emergency departments and other places where medical care is usually offered.

The California Supreme Court case is S152360; I don’t know enough about the California Supreme Court to know how the case is to be officially and permanently cited. (Anyone who does know should comment and inform me on this, please. 🙂 ) The opinon, released on the 19th, ruled 4-3 that moving an injured person from a believed-dangerous location at the scene of an emergency (judged so by the mover, although at odds with the judgments of others at the scene) does not constitute emergency medical care; thus Torti, who in this case moved her (presumably now former) friend Van Horn from such a location is liable for civil damages resulting from moving her. Where did the term medical come from? According to the California Supreme Court:

While section 1799.102 is certainly susceptible of Torti’s plain language interpretation, a “[l]iteral construction should not prevail if it is contrary to the legislative intent apparent in the statute. The intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act.” (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.)

In other words, the term medical has been read into the law by the Court from the other legislative provisions which surround it. (It wasn’t even done reasonably, either, as the dissenters in the case aptly show in their dissent.) Ergo, since moving a person from a dangerous situation in an emergency isn’t medical care, the Good Samaritan in this case can be held liable for damages caused by that action.

I believe I can confidently state that at least four of the justices on the California Supreme Court are not textualists.

(It’s worth noting that others present at the accident apparently contest that there was an actual emergency at the scene, because they saw no evidence the crashed car was going to explode. If that’s the case, the correct action would have been to contest that there was an emergency and thus prevent the Good Samaritan exception from applying. [In fact the dissent in its closing paragraph noted precisely this point.] This particular situation sounds to me like more a matter of nerves than anything else, but as that argument seems not to have been raised, it’s somewhat irrelevant now anyway.)

Second, it’s no big secret that California’s in the midst of a pretty hefty budget crisis (which, to the best of my knowledge, has been around since before the current economic upheavals — a situation also shared with Michigan, my immediate past home state). California’s legislatures have been attempting to address a projected $18 billion (or so) deficit for some time now. There’s merely one small roadblock to avoid in doing so: the California State Constitution in article 13A section 3 says that:

Section 3. From and after the effective date of this article, any changes in state taxes enacted for the purpose of increasing revenues collected pursuant thereto whether by increased rates or changes in methods of computation must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property may be imposed.

To parse that out a little and omit irrelevant text, it says that any change in state taxes for the purpose of increasing revenues must be part of a legislative act passed by two-thirds of each house of the California legislature. So unless the California legislatures can get two-thirds of each house to agree to a bill to do it (and they can’t, not in the middle of an economic downturn), they can’t combat the fiscal emergency by increasing taxes.

What should then be done? Clearly, if you can’t make more money through taxes and you can’t make money through bond sales because nobody wants to buy them, the only other option is that you should spend less money (or, most probably, a blend of the two). Instead, however, we have the following (and more like it) as described by California State Assemblywoman Noreen Evans:

Specifically, the bill enacts a new $0.39 per gallon fee on gasoline. This compares with the existing $0.18 per gallon excise tax and the 5% general sales tax on gasoline which is assessed per dollar. It enacts a new $0.31 per gallon diesel fee, and this compares with the existing $0.18 per gallon diesel excise tax.

(The source of that quote is an audio file at around 27:30 into it; I transcribed from the audio. My Google-fu on this topic isn’t up to snuff at least partly because I’m still new to California politics and don’t know the right names to use in search queries, so I’m having trouble finding the quote in text format online.) So what’s happening is our spades (“taxes”) are now shovels (“fees”), except super-sized, and that rule that applied to spades no longer applies just because we’re calling them shovels rather than spades. Instead, an increase in a “fee” requires only a majority vote, not a two-thirds super-majority vote. The Governator™ vetoed this constitutional end-run (or will be doing so, not sure about the exact timeline), but that the legislatures would have the sheer audacity to attempt this is breathtaking.

There’s a lesson to be learned here, kids: if you don’t like your constitution, just ignore it. Also, blame it on an obstructionist minority if you can; it’s not your fault you had to violate the constitution to which you took an oath/affirmation of allegiance.

(also cross-posted on RedState)