May 25th, 2006


Unintended consequences

During the Spanish-American War at the end of the 19th century, the US government imposed a 3% excise tax on telephones. At the time, only rich people had telephones; it was a "luxury" tax.

Fast forward a bit over a century... and today, after the government's losing in five appeals courts, they've given up and that tax will no longer be imposed... on long-distance calls. The Treasury Secretary appealed to Congress to repeal the excise tax on local calls as well.

If the only people who had to pay the tax were those who are always kvetching about the "evil rich," I wouldn't mind the tax; it would fall under the general category of "karma." Unfortunately, it doesn't work that way, so this is a day to celebrate. (People will be refunded the last three years' worth of the excise tax; it's only three years thanks to the statute of limitations.)

Yet another example of the Law of Unintended Consequences. Another is the Alternative Minimum Tax. It was also pushed as a way to close a loophole and make those wicked rich people pay "their fair share," but for several years it's been screwing over many people.

Is there any chance that people will wise up and not listen to those who pander to their envy? I sure hope so.
  • Current Music
    "Taxman," the Beatles