I saw a guy inhaling from an e-cigarette in a theater lobby the other night. That seemed to be OK. Now Lorillard is buying a company that makes them. And there’s a loophole. “Prices for e-cigarettes vary greatly but can cost half as much as traditional cigarettes, which are heavily taxed.” “Got a Light—er Charger? Big Tobacco’s Latest Buzz,” Mike Esterl, WSJ, April 26, 2012, http://online.wsj.com/article/SB10001424052702304723304577365723851497152.html Continue reading Beating the tobacco tax
Taxation without Hesitation was the name of a softball team made up of IRS workers in DC in the late 20th century. With our fiscal situation, I sometimes think that’s what America needs. But the aim here is to think about taxes analytically.
“In reality tax is the only truly funny subject taught in law school. It is human greed four mornings each week.” The late Marty Ginsburg, http://taxprof.typepad.com/files/135tn0177.pdf.
“British Prime Minister David Cameron will propose . . . that British retailers charge a minimum of 40 pence (63 cents) per unit of alcohol. A unit is the equivalent of 10 milliliters of pure alcohol.”
American taxes on alcohol depend on the form it comes in: alcohol in beer is taxed less than alcohol in liquor, with wine in between. Cameron’s policy of treating all alcohol alike has a lot of theoretical appeal. Why doesn’t he propose taxing it? Do pro-business leanings explain his desire to see the money to people in the alcohol business?
Quote is from Paul Sonne and Jeanne Whalen, Cameron Wants Brits to Pay More for Alcohol in Bid to Curb Drinking, WSJ, March 23, 2012, http://online.wsj.com/article/SB10001424052702304724404577297814271968518.html?KEYWORDS=alcohol+unit
When Senator Roth introduced a bill for an individual retirement account with no upfront deduction, part of the superficial appeal was that the revenue damage to the budget came outside the budget window. He called it the IRA Plus. My boss at the time (1988 or 1989 or 1990), Senate Finance Chair Lloyd Bentsen, said that PLUS stood for “Pay Later, Uncle Sam.” That retort became Tax Notes’ quote of the week. The name IRA Plus disappeared, and Senator Roth’s name got attached to what became the Roth IRA.
UPDATE: It was 1989, according to https://en.wikipedia.org/wiki/Roth_IRA.
The New Orleans Saints NFL team supposedly paid cash bounties to defensive players who injured opponents. http://www.nytimes.com/2012/03/03/sports/football/nfl-says-saints-had-bounty-program-to-injure-opponents.html?hp. I doubt that those payments were reported as income by the recipients, or reported to the IRS by the payors. If the justice system can’t convict the batterers, the tax system may be able to go after them. Like Al Capone.
Wanting to drown Uncle Sam (denying revenue to the Federal government so it’s small enough to drown in a bathtub, in the words of Grover Norquist) is as naive as Karl Marx’s formulation of the same idea: the withering of the state. The extremes meet.