The WSJ reports:
” . . . the disturbance followed aggressive collection of new charges for the use of machines used to make children’s wear, the town’s mainstay product. The tax was targeted at small, independent workshops that often aren’t licensed and are manned mostly by migrant laborers who earn money per piece produced.
“They said workshop managers were being charged between 300 yuan (about $48) and 600 yuan for each machine used, in what Chinese discussing the matter online called the ‘sewing-machine tax.’ It amounts to about twice as much as was collected in the past.”
It’s a lot easier for taxers to count sewing machines once than either (1) to measure production by counting each and every item that leaves the facility or (2) to measure piecework, maybe daily, payments to workers. Was the sewing machine tax in lieu of a tax on production? Maybe so, since the operators were reportedly unlicensed. In any event, it was too effective. And it targeted a narrow group that could identify its members.
Right out of college in 1969, my first job was teaching French at maybe the best public high school in North Carolina. I was making $6,300 a year, which seemed like a lot, since all-in costs at Davidson College had been around $2,000. So I could afford to go to France in the summers. The epiphany was when I found out I could deduct all my living expenses (I took some classes, did an internship or “stage,” and traveled).
Deductions for travel were later called a loophole: “Congressional discussion of the 1986 revisions makes clear that a French professor who tours France to brush up on his language skills is not entitled to a tax deduction.” http://chronicle.com/article/Tax-PlanningSabbatical/126293/. They got me. I was on the Joint Committee staff then, and don’t remember the change. I don’t think I was involved.
I remember, as I was putting my documentation together to claim my deduction, my father telling me, “If you claim $12 a day, they’ll never question it.” I was living low to the ground back then.