MauledAgain

A little more than eight years ago, in People’s Court: So Who Did the Tax Cheating?, I asked, “Do IRS employees watch television court shows?” I asked that question in the context of television court cases where one or both of the parties disclose, perhaps without realizing it, that they have engaged in transactions that the IRS most likely would consider to be tax fraud, or at least worth an audit and a tax deficiency with or without civil penalties, if the IRS was aware of what had been disclosed.

When I asked that question, I did not know the answer. I still do not know the answer. Today, reader Morris pointed me in the direction of a Reality Blurb story, describing how the IRS caught up with a character on Real Housewives of New Jersey and successfully charged her with tax fraud. According to the director of IRS field operations, an IRS agent who happened to be watching the show and noticed that the character purchased furniture with $120,000 in cash.

The news that an IRS agent was watching a reality show does not answer the question of whether IRS agents watch television court shows. Perhaps it makes a bit more likely. I did find a Reddit thread, in which someone described watching a Judge Judy episode in which she claimed many IRS agents watch the show to find tax cheaters. Some of the responses suggested she said this simply for sake of drama while others pointed out that it was possible, and still another asserted that there was not enough tax dollars involved in television court show cases to make it worthwhile for IRS agents to watch the shows. So reader Morris and I aren’t the only ones who wonder if IRS agents watch television court shows looking for tax violations.

Perhaps an IRS agent, or a friend or relative of an IRS agent, is willing to share that they watch television court shows. Perhaps they watch simply to be entertained. Perhaps they watch in order to spot people and situations deserving of audits and investigations. If I get any responses, I’ll share them.

I’ve been writing about the mileage-based road fee for almost 17 years. I have discussed it and other similar proposals, along with arguments made by those opposed to it, in posts such as Tax Meets Technology on the Road, Mileage-Based Road Fees, Again, Mileage-Based Road Fees, Yet Again, Change, Tax, Mileage-Based Road Fees, and Secrecy, Pennsylvania State Gasoline Tax Increase: The Last Hurrah?, Making Progress with Mileage-Based Road Fees, Mileage-Based Road Fees Gain More Traction, Looking More Closely at Mileage-Based Road Fees, The Mileage-Based Road Fee Lives On, Is the Mileage-Based Road Fee So Terrible?, Defending the Mileage-Based Road Fee, Liquid Fuels Tax Increases on the Table, Searching For What Already Has Been Found, Tax Style, Highways Are Not Free, Mileage-Based Road Fees: Privatization and Privacy, Is the Mileage-Based Road Fee a Threat to Privacy?, So Who Should Pay for Roads?, Between Theory and Reality is the (Tax) Test, Mileage-Based Road Fee Inching Ahead, Rebutting Arguments Against Mileage-Based Road Fees, On the Mileage-Based Road Fee Highway: Young at (Tax) Heart?, To Test The Mileage-Based Road Fee, There Needs to Be a Test, What Sort of Tax or Fee Will Hawaii Use to Fix Its Highways?, And Now It’s California Facing the Road Funding Tax Issues, If Users Don’t Pay, Who Should?, Taking Responsibility for Funding Highways, Should Tax Increases Reflect Populist Sentiment?, When It Comes to the Mileage-Based Road Fee, Try It, You’ll Like It, Mileage-Based Road Fees: A Positive Trend?, Understanding the Mileage-Based Road Fee, Tax Opposition: A Costly Road to Follow, Progress on the Mileage-Based Road Fee Front?, Mileage-Based Road Fee Enters Illinois Gubernatorial Campaign, Is a User-Fee-Based System Incompatible With Progressive Income Taxation?. Will Private Ownership of Public Necessities Work?, Revenue Problems With A User Fee Solution Crying for Attention, Plans for Mileage-Based Road Fees Continue to Grow, Getting Technical With the Mileage-Based Road Fee, Once Again, Rebutting Arguments Against Mileage-Based Road Fees, Getting to the Mileage-Based Road Fee in Tiny Steps, Proposal for a Tyre Tax to Replace Fuel Taxes Needs to be Deflated, A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee, Another Example of a Problem That the Mileage-Based Road Fee Can Solve, Some Observations on Recent Articles Addressing the Mileage-Based Road Fee, Mileage-Based Road Fee Meets Interstate Travel, If Not a Gasoline Tax, and Not a Mileage-Based Road Fee, Then What?>, Try It, You Might Like It (The Mileage-Based Road Fee, That Is) , The Mileage-Based Road Fee Is Superior to This Proposed “Commercial Activity Surcharge”, The Mileage-Based Road Fee Is Also Superior to This Proposed “Package Tax” or “Package Fee”, Why Delay A Mileage-Based Road Fee Until Existing Fuel Tax Amounts Are Posted at Fuel Pumps?, Using General Funds to Finance Transportation Infrastructure Not a Viable Solution, In Praise of the Mileage-Base Road Fee, What Appears to Be Criticism of the Mileage-Based Road Fee Isn’t, Though It Is a Criticism of How Congress Functions, Ignorance and Propaganda, A New Twist to the Mileage-Based Road Fee, The Mileage-Based Road Fee: Simpler, Fairer, and More Efficient Than the Alternatives, Some Updates on the Mileage-Based Road Fee, How to Pay for Street Reconstruction, Stop the "Stop EV Freeloading Act" Because The Mileage-Based Road Fee Is a Much Better Way to Go, Why Is Road Repair and Maintenance Funding So Difficult for Public Officials to Figure Out?, Should (Will) Implementing the Mileage-Based Road Fee Cause Privatization of Highway Infrastructure?, The Freedom Caucus Doesn’t Understand that the Mileage-Based Road Fee is “PRO-Freedom,” Not the Opposite, A Mileage-Based Road Fee by Any Other Name?, Does the Mileage-Based Road Fee Work for Local Road Maintenance?, and Washington State Mileage-Based Road Fee Proposal Changes: Is It Better?

Today, reader Morris directed my attention to a proposal by the Truckload Carriers Association for a "Gallons-Based User Fee” or GBUF. Though described as a “simple, common-sense update to the current fuel tax,” it is nothing more than an increase in the existing federal fuel tax along with an “annual registration fee for electric vehicles.” That fee would be $250 annually for electric vehicles and $100 annually for hybrid vehicles. The proposal also includes repeal of the federal 12 percent excise tax on new trucks and trailers. The proponents of GBUF make two arguments. First, they argue that the “federal fuel tax is the most efficient and cost-effective way to fund highway improvements.” Second, they argue that the GBUF “does not require a new collection system or a costly bureaucracy.” They don’t mention that they are not so subtly changing the designation of the revenue from a tax to a user fee, perhaps to make it appear new or perhaps, and more likely, to avoid accusations of supporting a tax increase, something that finds little favor these days.

The proponents make no mention of the fact that some states have already implemented the mileage-based road fee in some form, whether as a pilot program, a voluntary opt-in arrangement, or some similar plan. Though the mileage-based road fee does not require a costly bureaucracy because it would rely on existing vehicle and internet technology to calculate and impose the fee, it easily could be adapted so that states use their fee collection system to collect revenue on behalf of the federal government and remit those collections to the Treasury.

I wonder if one of the reasons the Truckload Carriers Association prefers raising the fuel tax instead of opting for a more accurate mileage-based road fee is that the road fee takes into account the weight of the vehicle, because the heavier the vehicle the more damage to the roads, bridges, and tunnels. For example, compare a 10,000 pound diesel powered box truck with an 80,000 pound diesel powered tractor trailer. The former gets between 13 to 20 miles per gallon whereas the latter gets between 6 to 8 miles per gallon. So to go the same distance of 1000 miles, the tractor-trailer would use between 125 to 167 gallons whereas the box truck would use between 50 and 77 gallons. The tractor trailer would use between 1.6 to 3.3 times as much fuel to cover that distance, and would pay between 1.6 to 3.3 times as much fuel tax. Yet the tractor trailer does far more than 1.6 to 3.3 times as much damage to the roads, bridges, and tunnels. According to the GAO’s Truck Weight and Its Effect on Highways, an 80,000 pound tractor trailer “has the same impact on an interstate highway as 9,600 automobiles,” and “a truck axle carrying 18,000 pounds is only 9 times heavier than a 2,000-pound automobile axle, it does 5,000 times more damage.” In effect, the current fuel tax system, no matter the amount of the per-gallon tax, causes lighter weight vehicles to subsidize a significant portion of the damage done by heavier weight vehicles. The mileage-based road fee, with rates set to match vehicle weights, ameliorates this funding imbalance.

Just as bad, a flat fee for electric and hybrid vehicles presupposes that those vehicles do the same damage to highway infrastructure when, in fact, the miles that each of those vehicles are driven can vary from as little as 2,000 annually to as much as 30,000 or more annually. The mileage-based road fee takes those differences into account. The flat fee does not. On top of this flaw, though the GBUF proponents claim that their proposal “does not require a new collection system or a costly bureaucracy,” it indeed would require a new federal mechanism to impose those flat fees.

In conclusion, though raising the federal fuel tax is better for preservation of federally supported highway infrastructure than doing nothing, it pales in comparison to implementing a mileage-based road fee. Fairness and efficiency weigh in favor of a permanent remediation rather than the seemingly easier but eventually ineffective band-aid of raising a 20th century tax mechanism that doesn’t function well in a 21st century world.

Another interesting television court show popped up, and, yes, it involved taxes. As readers know, I have addressed tax issues in television court shows many times, in posts such as Judge Judy and Tax Law, Judge Judy and Tax Law Part II, TV Judge Gets Tax Observation Correct, The (Tax) Fraud Epidemic, Tax Re-Visits Judge Judy, Foolish Tax Filing Decisions Disclosed to Judge Judy, So Does Anyone Pay Taxes?, Learning About Tax from the Judge. Judy, That Is, Tax Fraud in the People’s Court, More Tax Fraud, This Time in Judge Judy’s Court, You Mean That Tax Refund Isn’t for Me? Really?, Law and Genealogy Meeting In An Interesting Way, How Is This Not Tax Fraud?, A Court Case in Which All of Them Miss The Tax Point, Judge Judy Almost Eliminates the National Debt, Judge Judy Tells Litigant to Contact the IRS, People’s Court: So Who Did the Tax Cheating?, “I’ll Pay You (Back) When I Get My Tax Refund”, Be Careful When Paying Another Person’s Tax Preparation Fee, Gross Income from Dating?, Preparing Someone’s Tax Return Without Permission, When Someone Else Claims You as a Dependent on Their Tax Return and You Disagree, Does Refusal to Provide a Receipt Suggest Tax Fraud Underway?, When Tax Scammers Sue Each Other, One of the Reasons Tax Law Is Complicated, An Easy Tax Issue for Judge Judy, Another Easy Tax Issue for Judge Judy, Yet Another Easy Tax Issue for Judge Judy, Be Careful When Selecting and Dealing with a Tax Return Preparer, Fighting Over a Tax Refund, Another Tax Return Preparer Meets Judge Judy, Judge Judy Identifies Breach of a Tax Return Contract, When Tax Return Preparation Just Isn’t Enough, Fighting Over Tax Dependents When There Is No Evidence, If It’s Not Your Tax Refund, You Cannot Keep the Money, Contracts With Respect to Tax Refunds Should Be In Writing, Admitting to Tax Fraud When Litigating Something Else, When the Tax Software Goes Awry. How Not to Handle a Tax Refund, Car Purchase Case Delivers Surprise Tax Stunt, Wider Consequences of a Cash Only Tax Technique, Was Tax Avoidance the Reason for This Bizarre Transaction?, Was It Tax Fraud?, Need Money to Pay Taxes? How Not To Get It, When Needing Tax Advice, Don’t Just “Google It”, Re-examining Damages When Tax Software Goes Awry, How Is Tax Relevant in This Contract Case?, Does Failure to Pay Real Property Taxes Make the Owner a Squatter?, Beware of the Partner’s Tax Lien, Trying to Make Sense of a “Conspiracy to Commit Tax Fraud”, Tax Payment Failure Exposes Auto Registration and Identity Fraud, A Taxing WhatAboutIsm Attempt, When Establishing A Business Relationship, Be Consistent, as the Alternative Can Be Unpleasant Litigation, Sadness on Multiple Levels: Financial Literacy, Factual Understanding, Legal Comprehension, When the Lack of Facts Produces “Rough Justice” in a Tax-Related Case, Is the Tax Return Preparer or the Client Responsible For Unjustified Deductions?, Tax Might Be Boring, But the Underlying Facts Often Are Not, When Tax Fraud Is Admitted in a Civil Arbitration Proceeding Known As a Television Court Show, and When Allegations Go Unproven: Did a Television Court Show Involve Tax Fraud.

This particular television court show was episode 176 of season 10 of Hot Bench, which originally aired on 19 August 2024. I could not find the actual episode online other than behind some unfamiliar pay sites.

The plaintiff and defendant worked for the same contractor. The defendant did not want to fill out a W-9 for the contractor because, as the defendant admitted, he was in arrears on child support and did not want the IRS to know he had wages that could be used to pay the child support obligations.

So the contractor, the plaintiff, and the defendant entered into an arrangement that made the plaintiff, in effect, a subcontractor. Under the arrangement, the contractor would remit to the plaintiff the wages that would have been paid to the defendant, and the plaintiff would pay that amount to the defendant. The plaintiff made the payments in cash because the defendant refused to accept a check.

The plaintiff had three other employees. Those employees filled out W-9 forms delivered to the plaintiff, and the plaintiff paid those employees with checks.

According to the plaintiff, a fourth W-9, in a name other than the defendant’s, was included with the other three W-9 forms, when the plaintiff’s tax returns were prepared by the plaintiff’s tax return preparer. The defendant denied filling out a W-9 form. When asked about this W-9 form, the plaintiff testified he had not looked at it and did not realize it had a name other than the defendant’s name. One of the judges asked the plaintiff if it was not strange that the defendant, who refused to fill out a W-9 for the contractor, would have filled out a W-9 form for the plaintiff.

The IRS and the California Franchise Tax Board sent notices to the plaintiff that taxes had not been remitted for the payments made to the defendant. The plaintiff did not have those documents to present as evidence for the explanations provided by those two agencies. The IRS and the Franchise Tax Board levied on the plaintiff’s bank account. The plaintiff sued the defendant, seeking reimbursement from the defendant.

One judge noted that the failure to bring the documents issued by the agencies made it difficult to conclude that the amounts taken were on account of the payments made to the defendant by the plaintiff. The court found the plaintiff’s explanations inadequate to justify a decision in his favor. The court also pointed out that the arrangement into which the parties entered meant that the plaintiff was coming into court with “unclean hands.” The court also noted that the plaintiff waited three years to bring the lawsuit against the defendant. During the deliberations, the judges observed that the plaintiff could have turned to the IRS and Franchise Tax Board to explain that those agencies had made an error and that he did not have an employee with the name on the W-9 form, and that he had not done so.

For these reasons, the court dismissed the plaintiff’s complaint. That conclusion was not a surprise. As I watched the episode, very early on I knew what the outcome would be, because the unclean hands doctrine was so readily apparent. The defendant could not have been more obvious in declaring a refusal to fill out a required tax form because of a desire to hide wages from the IRS. The plaintiff knew what was being planned and went along with the scheme. Unfortunately, the contractor was not in court and could not be questioned, especially the question asked by one of the judges during deliberations, which was why not simply fire an employee who refused to fill out and submit to the employer a required W-9 form.

It’s time to revisit the world of tax return preparers who get into serious trouble because of misdeeds. I have written about tax return preparers in posts such as Tax Fraud Is Not Sacred, More Tax Return Preparation Gone Bad, Another Tax Return Preparation Enterprise Gone Bad, Are They Turning Up the Heat on Tax Return Preparers?, Surely There Is More to This Tax Fraud Indictment, Need a Tax Return Preparer? Don’t Use a Current IRS Employee, Is This How Tax Return Preparation Fraud Can Proliferate?, When Tax Return Preparers Go Bad, Their Customers Can Pay the Price, Tax Return Preparer Fails to Evade the IRS, Fraudulent Tax Return Preparation for Clients and the Preparer, Prison for Tax Return Preparer Who Does Almost Everything Wrong, Tax Return Preparation Indictment: From 44 To Three, When Fraudulent Tax Return Filing Is Part of A Bigger Fraudulent Scheme, Preparers Preparing Fraudulent Returns Need Prepare Not Only for Fines and Prison But Also Injunctions, Sins of the Tax Return Preparer Father Passed on to the Tax Return Preparer Son, Tax Return Preparer Fraud Extends Beyond Tax Returns, When A Tax Return Preparer’s Bad Behavior Extends Beyond Fraud, More Thoughts About Avoiding Tax Return Preparers Gone Bad, Another Tax Return Preparer Fraudulent Loan Application Indictment, Yet Another Way Tax Return Preparers Can Harm Their Clients (and Employees), When Unscrupulous Tax Return Preparers Make It Easy for theblo IRS and DOJ to Find Them, Tax Return Preparers Putting Red Flags on Clients’ Returns, When Language Describing the Impact of Tax Fraud Matters, Injunctions Against Fraudulent Tax Return Preparers Help, But Taxpayers Still Need to Be Vigilant, Will the Re-Introduced Legislation Permitting Tax Return Preparer Regulation Be Enacted, and If So, Would It Make a Difference?, Can Fraudulent Tax Return Preparation Become An Addiction?, Tax Return Preparers Who Fail to File Their Own Returns Beg For IRS Attention, Using a Tax Return Preparer? Take Steps to Verify What Is Filed on Your Behalf, When Dishonest Tax Return Preparers Are Married, There Was Nothing Magical About This Tax Return Preparation Business, Don’t Get Burned By a Tax Return Preparer, Tax Fraud School: When It’s Not Enough to Be a Fraudulent Tax Return Preparer, It’s Not Just Tax Return Preparers Assisting in the Preparation of Fraudulent Tax Returns, Overused Fraudulent Tax Return Preparation Ploys, It’s Not Just Law Enforcement That Confronts Misbehaving Tax Return Preparers, When An Injunction Doesn’t Stop a Tax Return Preparer from Filing False Returns, Filing a Fraudulent Tax Return Is Bad, Filing More Than 3,000 Is Outrageously Bad, When It Comes to Fraudulent Tax Returns, It's Not Always the Preparers, A Procedural Twist on Dealing with Fraudulent Tax Return Preparers, Can Tax Return Preparers Learn from the Misdeeds of Other Preparers?, Should Tax Return Preparers Use Their Full Legal Names?, Is There Ever a Free Lunch, Even in the Tax Return Preparation Business?, Is the Tax Return Preparer or the Client Responsible For Unjustified Deductions?, and When Preparing False Tax Returns Seems to Lack a Financial Motive.

What got my attention this time wasn’t the fact that a tax return preparer filed fraudulent returns on behalf of clients, many of whom did not know he had claimed credits on their returns to which they were not entitled. It was the fact that after being convicted and while awaiting sentencing he continued to prepare fraudulent returns.

According to a Department of Justice press release issued yesterday, a Yeadon, Pa., tax preparer was sentenced to three years in prison, one year of supervised release, a $10,000 fine, and $12,717 in restitution, for “knowingly and willfully including false energy credits in tax forms that he prepared for paying customers.” He did this for tax years 2018 through 2020, preparing at least 146 returns “that falsely offset tax liabilities or claimed reimbursable credits for money allegedly spent on wind turbines, solar panels, or other energy improvements.” According to the Department of Justice, he did this “because he wanted to increase client refunds and client satisfaction.” These false returns “caused his clients to understate their tax liabilities by more than $700,000.” In September of 2024, the preparer “pleaded guilty to an information charging him with one count of aiding and assisting in the preparation of a false tax return, and admitted to filing the other 145 false returns, along with his own false returns for the same three tax years.” The restitution is for the taxes he evaded on his own return. His clients are responsible, unfortunately, for the understated taxes on their returns.

It wasn’t the press release that drew my attention to the case. It was this article in this morning’s Philadelphia Inquirer. It may be behind a paywall, but I’ve not been able to find any other online source for the additional information revealed in the article. According to the article, after pleading guilty, the preparer continued to prepare tax returns. Court officials and the Department of Justice were initially unaware of this development. When they discovered that the preparer continued to prepare tax returns, they figured out that he did so using his mother’s electronic filing identification number. By the time his continued tax return preparation activities were discovered he had filed more than another one thousand returns. During court proceedings, the preparer claimed he was no longer working as a preparer, and making money by doing Lyft and Uber driving and doing home health services. When the sentencing hearing was postponed because of the discovery, the preparer did not stop and filed another 70 returns using his mother’s identification number.

Though the prosecutors asked that the prepare be sentenced to 41 to 51 months in prison, the judge limited the sentence to three years. Three years is the statutory maximum for the offenses to which the preparer had pleased guilty. It is unclear whether additional chargers will be brought. I suppose it depends on whether there were fraudulent claims on the more than 1,000 additional returns he prepared and on whether prosecutors decide to pursue perjury charges for his false testimony that he had stopped preparing returns.

So is it foolishness or courage when a person continues to engage in behavior that causes the person to be indicted and convicted of – or to plead guilty to – criminal tax fraud charges? We often hear the question, “What were they thinking?” and often the answer is, “They weren’t.” But in this instance the use of the mother’s identification number suggests that the continued tax return preparation activity, together with the denial that it was underway, was not simply accidental or negligent. The Philadelphia Inquirer article notes that the preparer “has a master’s degree and kept up with annual tax-prep training.” Wondering if “master’s degree” meant an LL.M. (Taxation) or a Masters of Taxation, I checked and learned that he has an M.B.A. and not a tax degree. Yet one would think that “annual tax-prep training” would include warnings about the impropriety and illegality of claiming deductions and credits for which taxpayers are not eligible as well as the risks of getting caught and the consequences that flow from preparing and filing false returns.

I’ve been asked why I haven’t been commenting on the federal legislation that would extend and enlarge tax cuts and tax breaks for wealthy individuals and corporations. The answer is simple. What else am I going to say? I've explained in the past, many times, that giving tax breaks and low or zero tax rates to the wealthy and corporations does not create jobs. Jobs are created when there is a demand for the goods and services being provided by a seller. As more wealth is shifted from the poor and especially the middle class, demand from those sectors, which constitute almost all of the economy, will go down. Add to that tariffs, and demand will drop even more. When demand goes down, the economy shrinks. Fewer and fewer jobs are created and more and more workers are dismissed. How do I know this? I went to Wharton. I went to class. I earned my degree.

For some reason I have not always written a Memorial Day essay over the 21-plus years MauledAgain has existed. I don’t know why. I do know that I have written not only about the memories of those who have fallen in service to this nation but also about the freedom for which they fought and died. Freedom, it seems to me, is an oft-misunderstood concept. In 2023, in Indeed, Freedom Is Not Free, I explained why freedom is not the same thing as unregulated behavior. Last year, in Freedom To Do or Freedom From or Both?, I concluded that there are two sides to freedom, “freedom to do” and “freedom from.” These concepts are mutual, because “freedom to do” is simply “freedom from” regulation, authority, and social constraint, and “freedom from” is simply “freedom to do” whatever is being escaped.

So many of the articles, commentaries, broadcasts, social media postings, cartoons, and memes that address Memorial Day proclaim respect, appreciation, and gratitude for those who fought and died to protect “our freedoms.” In other words, they fought FOR freedom. They fought to DEFEND freedom. But against whom or what have they fought? Freedom needs protection and defense only if there is something that opposes freedom. There are all sorts of names for what opposes freedom, ranging from repression through authoritarianism to totalitarianism, and many hours and words have been devoted to debates over which of these words properly describe what stands in the way of freedom. But does it matter? All of these movements, ideologies, and worldviews can be lumped together under the term “anti-freedom.” Memorial Day is a day to honor those who fought against and died fighting anti-freedom.

Does it not make sense that the best way to honor those who fought and died defending freedom against anti-freedom is to follow a path that does not lead to, and does not wander through, the anti-freedom desert? Does it not make sense that following a freedom path requires those who are alive and benefitting from freedom do their part in standing up to anti-freedom when its ugly head reappears, as it has over the millennia during which humans have lived? Does it make sense to behave in the same manner as those against whom the defenders of freedom fought and sacrificed their lives in doing so? Of course not. It makes no sense to throw away all that was saved, protected, and cherished by those who fought and died, because to do so means that their lives were sacrificed in vain. Do we want them observing this nation and asking themselves, and asking us, “Why did we bother?”

Yet there are those who claim to be “freedom lovers,” many of whom join in Memorial Day tributes of one sort of another to our fallen heroes, whose behavior is frighteningly similar to that of those who posed the threats against freedom that sparked the battles and wars in which the heroes fell. How does one explain this incongruity? The answer rests in that tension between “freedom to do” and “freedom from” that I described in Freedom To Do or Freedom From or Both?. A simple example of this tension is the conflict between “freedom to do” 90 miles per hour on the highway and another person’s “freedom from” injury and death while driving. As I wrote in that post,

What makes the analysis particularly difficult on Memorial Day is a troubling tension between “freedom from” and “freedom to do.” On Memorial Day we remember and honor those who died to give this nation “freedom from” authoritarianism, dictatorship, repression, and ethnocentrism. Yet we also seem increasingly complacent when those who benefitted from the sacrifice of those we honor claim to have the “freedom to do” the very same behaviors the suppression of which was the purpose for which those we honor fought and died. It is particularly disturbing when people who profess a deep admiration for those who gave their lives to protect the nation from those enumerated evils are at the same time supporting people and policies that nurture and enlarge those same evils in this nation. What was the point of so many sacrifices to eliminate authoritarianism, dictatorship, repression, and ethnocentrism when there are people who want those same attributes to become the linchpin of this nation’s existence?

And now, a year later, it isn’t just a matter of those who are “increasingly complacent” but those who are “supportive” of those whose behavior, policies, and decisions are less aligned with the freedom for which many died and more aligned with the ideologies and goals of those who wear the hat of “anti-freedom.”

I’ve written several times that freedom has its limitations, and that it comes at a price. The price is not only the sacrifice of those who fought and died protecting it, but the recognition of those who benefit from freedom that there are limits to what freedom permits someone to do. Freedom does not provide permission to be, or support, anti-freedom. By definition, freedom cannot be, cannot support, and cannot abide, anti-freedom.

Fourteen years ago, in Music and the Tax Brain, I shared some thoughts about the connection between learning and performing music and learning and performing tax. I use the word “performing” rather loosely when referring to tax, but I include everything from preparing tax returns to teaching tax law, from analyzing the tax consequences of a planned transaction to analyzing facts relevant to tax policy decisions. In that commentary, I wrote:

Monday’s Philadelphia Inquirer brought a small item that described the results of research exploring the connection between childhood music lessons and long-term brain health. The headline caught my eye because I could relate to it. When I saw “Those clarinet lessons helped you tune up for your later years,” I had no practical choice but to keep reading. Why? When I was a child, my father taught me to play the clarinet. Or perhaps I should say that he tried to teach me. I made progress, but certainly not to the level that would open the doors to any concert hall. Part of my failure to progress competently was my resistance to what I perceived as an irrelevant instrument in the days when playing guitar – especially electric guitar – seemed to be the gateway to success in a variety of venues. My father would have nothing of rock music. * * * I, however, long ago abandoned the clarinet, though I still own several. I did not abandon my love of music, and dabble with keyboards, though quite inadequately.

So this Philadelphia Inquirer story suggested that I might owe my father an apology. According to the report, researchers examined 70 adults with similar levels of education and fitness, and who had no symptoms of Alzheimer’s disease. The adults were give a battery of cognitive tests. Who scored the best? Those with ten or more years of musical training. Who scored the lowest? Those with no musical training. Those running the study want to do more research, to determine if the cognitive performance enhancement is caused by the music lessons or by some other factor.

The lead research tossed out an idea that I found quite plausible. “Since studying an instrument requires years of practice and learning, it may create alternate connections in the brain that could compensate for cognitive declines as we get older.” If that indeed is the case, then would not the same cognitive achievement be attained by other endeavors requiring years of practice and learning? Certainly more research is in order.

So where does tax fit in? Two questions pop into my brain. Do years of practice and learning involving tax have the same effect as years of practice and learning involving music? Do years of practice and learning involving music make a person more proficient in learning tax? When I was a student in the basic federal income tax course, the professor often referred to “music majors” as a stereotype of students he expected to struggle in the course. Yet, my years of teaching have taught me that music majors do well in tax law. Though I’ve not conducted any empirical or laboratory research, I have convinced myself that the reason rests on the number of shared characteristics between music and tax law. Both require attention to detail. Both require careful reading. Both emphasize the need to recognize and apply patterns and sequences. Both are highly structured. Both are, to some extent, mathematical. Both involve interpretation. Both require precision. Both require the learning of a new language. The only difference between music and tax law that I could find has nothing to do with the learning process. Music makes almost everyone happy. That cannot be said about tax law.

This isn’t my first foray into the connections between tax and cerebral characteristics. Not long ago, in The Tax Brain, I asked:

Is there such a thing as a tax brain? Is there something to be said for the fact that most tax practitioners are proficient in semantic language processing and arithmetic calculation? Are there areas of a tax person’s brain that are larger or smaller than the typical brain, or that show higher or lower levels of activity? Are the brains of tax professionals awash with dopamine or with noradrenaline?

Now, to that list of questions, I add, “Do musicians and tax professionals find themselves in the same part of the intellectual family tree?” Perhaps a more important question is this: “Do tax professionals face a lower risk of cognitive decline as they get older?” There are plenty of anecdotes that I could share. What I prefer to see is an appropriately conducted study.

Note that I suggested both “Certainly more research is in order,” and “What I prefer to see is an appropriately conducted study.”

Today Reader Morris referred me to that fourteen-year-old commentary and directed my attention to two studies. The first, Education, occupational complexity, and incident dementia: A COSMIC collaborative cohort study, concludes that “The meta-analytic results indicated that both education and occupational complexity were independently associated with increased dementia-free survival time, . . .” The study did not dig to the granular level of analyzing the various complex occupations to determine whether tax professional and music professionals have different outcomes with respect to dementia-free survival time, let alone the many other complex professions in which people engage. Nor did the study explore – as it was not designed to focus on – the physical and neurological impact on the brain of engaging in music or tax for long periods of time at a more than superficial level.

The second study, described in this report, looked at the connection between occupations and Alzheimer’s disease (AD). In short, “Researchers have found that the risk of death due to AD is markedly lower in taxi and ambulance drivers compared with hundreds of other occupations. And the reason could be that these drivers develop structural changes in their brains as they work.” This difference did not show up when testing for dementia other than AD. The study suggested that perhaps the reason for this outcome is that ambulance and taxi drivers need to use “real-time spatial and navigational skills” in their jobs. Yet persons in other occupations requiring these skills, such as aircraft pilots and ship captains, not only did not experience the same low incidence of AD but “had some of the highest rates of death due to AD.” Bus drivers also did not benefit but fell within the average rate of death due to AD.

The study questions, “And why aren't bus drivers, pilots, and ship captains similarly protected? The study authors suggest these other jobs involve predetermined routes with less real-time navigational demands. Thus, they may not change the hippocampus as much.” I think there is something else involved. I see a difference between ambulance and taxi drivers on the one hand and bus drivers, aircraft pilots, and ship captains on the other, and I wonder if it matters. The former interact with their passengers (consider that ambulance drivers also function as EMTs) whereas the latter don’t interact or if they do, they interact infrequently and with less depth. Other studies, such as New Studies Suggest Social Isolation Is a Risk Factor for Dementia in Older Adults, Point to Ways to Reduce Risk, and Being Social May Delay Dementia Onset by Five Years, suggest that continued social engagement tends to lower dementia risk whereas it increases in older people who are isolated and have little or no social interaction.

And that brings me back to tax and music. Musicians engage in social contact, not only with other members of a chorus, orchestra, or band, but also with audiences, fans, promoters, agents, stage hands, and the entire array of people who interact with the performers. What about tax professionals? Despite the perception that “tax geeks” sit alone immersed in reading the Internal Revenue Code as a novel (though I did do that, years ago), tax professionals interact with clients, with co-workers, with other professionals, with federal, state, and local tax collectors and auditors, with employees, and sometimes with judges. Is this social interaction of sufficient amount? Can it be measured and compared to the social interaction of musicians and persons in other occupations? Perhaps these questions will be the subject of future studies.

According to a recent survey of college graduates by WalletHub, “2 in 3 students think their school is not doing enough to educate them about personal finance.” My first thought was a simple one. Why is it the responsibility of colleges to prepare students to handle personal finance? Answering that question requires an examination of the role of a college education and the responsibilities of K-12 educational systems.

There are many different descriptions of what college education should provide. These descriptions are not necessarily mutually exclusive. Yes, there are college programs and majors that prepare students for specific professions and jobs that cannot be performed competently with only a K-12 education, just as trade schools prepare students for careers and jobs that require more than what is learned in K-12 schools. Yes, college gives students opportunities to grow, to learn more about a wider world than what they saw while in K-12 systems. Yes, college gives students opportunities for self-discovery, for emotional and educational growth, and to develop independence, but those aspects of college can also be experienced in other life paths. Some claim that college teaches students how to think critically and solve problems, but college isn’t the only place that these skills can be learned.

What college should not be teaching, other than in a remedial context when dealing with students whose K-12 educations have been deficient, are skills and knowledge that everyone needs. Why? Those skills and knowledge need to be taught before students graduate from K-12 institutions because there is no guarantee that the life paths they choose will take them to a place where those skills and knowledge can be acquired.

Everyone needs to learn how to think critically and to solve problems. Everyone needs to learn personal finance. These are not life skills that are needed only by people who attend college. That is why these skills need to be addressed in the K-12 system. Of course, they’re not the only skills that need to be developed in the K-12 system. Though K-12 students are instructed in reading, writing, and arithmetic, and many are exposed to courses in science, foreign languages, and history, there are deficiencies. I have written many times about the need for K-12 students to learn basic principles of taxation, to study civics, to learn geography, to learn world history, and to learn how to learn. So it should be no surprise that my answer to the question heading this commentary is simple. Somewhere in the K-12 journey students need to learn about personal finance.

Though I advocate for a mandatory personal finance course (and perhaps an elective advanced personal finance course) in K-12 education, I also propose that parents not abandon the teaching of personal finance to the school system. Though some parents themselves are far from proficient when it comes to their own finances, many parents have learned, somehow, how to handle their personal finances and do so competently. There are ways of teaching children at home about budgeting, saving, taxes, interest rates, and investments without disclosing to the children details that the parents do not want to share with their children. And it’s not just personal finance that needs to be explained at home. It’s just one of many skills and pieces of knowledge that too often don’t get transmitted to youngsters at home for a variety of reasons. Though the K-12 system can provide this education in a professional manner, experiences at home can reinforce what the schools are teaching.

Though I may be wrong, I interpret the result of the survey as an acknowledgement by way too many college students that they are lacking necessary personal finance skills. Is it as many as 2 in 3? Probably not, because there surely are college students who learned these skills through other means but who are aware that their college is not teaching these skills. Perhaps they are thinking that their colleges should be teaching these skills, perhaps because they think that is where they should be taught. Or perhaps they are aware of the deficiencies in their K-12 education and think that colleges bear the responsibility for filling in the gaps left by the K-12 experience. Remedial education to fill in gaps in prior educational systems isn’t limited to undergraduate programs filling in what’s missing in their incoming students. Graduate and post-graduate programs also face the need, and may step up to fill it, when they assess the skills and knowledge of their students.

Trying to live life without personal finance skills is like trying to eat soup with a fork. It might be possible, but it’s going to take a long time, and it’s going to be messy. It’s easier to find a spoon, just as life is easier, much easier, when lived with the ability to handle one’s personal finances.

It’s been several years since I last wrote about the “size of Internal Revenue Code” – “size of tax law” debate. It gets to the point when I decide that the marginal benefit of providing the same explanation diminishes so much that those who understand have learned, those who cannot or do not want to understand will persist in their ignorance, and those who benefit of think they will benefit from publishing untruths aren’t going to be persuaded to take the side of integrity.

I have been addressing this issue almost as long as I’ve been writing this blog. My attempts to educate people began with Bush Pages Through the Tax Code?, and continued through Anyone Want to Count the Words in the Internal Revenue Code?, Tax Commercial’s False Facts Perpetuates Falsehood, How Tax Falsehoods Get Fertilized, How Difficult Is It to Count Tax Words, A Slight Improvement in the Code Length Articulation Problem, and Tax Ignorance Gone Viral, Weighing the Size of the Internal Revenue Code, Reader Weighs In on Weighing the Code, Code-Size Ignorance Knows No Boundaries, Tax Myths: Part XII: The Internal Revenue Code Fills 70,000 Pages, Not a Surprise: Tax Ignorance Afflicts Presidential Candidates and CNN, The Infection of Ignorance Becomes a Pandemic, Getting Tax Facts Correct: Is It Really That Difficult?, Reaching New Lows With Tax Ignorance, Incorrectly Breaking Down the Internal Revenue Code, Is Tax Ignorance Eternal?, So How Long Does It Take to Read the Internal Revenue Code?, Much More Than the Internal Revenue Code, and A Tax Expert Is Just a Phone Call or Email Away.

Yet sometimes it is valuable to revisit a topic that has been dormant for a while but has resurfaced. Why? If the resurgence continues to parrot the erroneous information, people who are new to the debate can be easily misled. This is especially so if they don’t take the time to do some research and evaluate what they are reading or hearing rather than simply taking everything they hear or read at face value. Sadly, that’s a pattern of behavior that has an impact far beyond the question of the size of the Internal Revenue Code.

Fortunately, there are people who know the realities of Internal Revenue Code size and who know it is a topic I’ve often addressed. Today a reader shared with me a link to an article on The Hill, in which Tobias Burns, writing about the current disputes and machinations about and at the IRS, claims, “The U.S. has one of the most complicated sets of tax laws in the world, spanning millions of words and tens of thousands of pages, excluding myriad pages of case law.” Had he done a bit of research he would have discovered that my last commentary on the topic also involved an article in The Hill written by Joseph Chamie. In A Tax Expert Is Just a Phone Call or Email Away, I criticized Chamie for writing, among other things, that “The tax code or Title 42 of laws that the IRS enforces involves no less than 2,600 pages or well over 1 million words.” Aside from noting his erroneous reference to “tax code or Title 42 of laws,” which was subsequently fixed, I also pointed out that the assertions about the number of pages and the number of words were wrong. At least Chamie provided the sources of his information, namely Vox and the Tax Foundation, though both sources were similarly at best exaggerated and at worst deliberately misleading. The Burns article does not provide any citations or other indications of where he obtained his information. Needless to say, what he writes in terms of pages and words is wrong.

As the title of my previous post, A Tax Expert Is Just a Phone Call or Email Away, it’s rather easy to get to the reality of Internal Revenue Code size. As I wrote in that previous post, “There are tax professionals who could have steered him to an article such as Andrew Grossman’s 2014 explanation in Slate, or goodness, to my ongoing thread addressing the issue.” Failure to do research and to check in with experts, I continued, “increases the circulation of ambiguous, inarticulate, and misleading information about tax law. I wish he had called or emailed someone who understands the scope of the Internal Revenue Code and tax law.” The same can be said about the need for research and checking in with experts in almost every other area of life.

In You Pay ALL the Taxes, Tom Giovanetti of the Institute for Policy Innovation explains that “only people pay taxes.” He argues that in addition to taxes paid directly by individuals to taxing jurisdiction, individuals ultimately pay the taxes submitted by corporations and other entities because ultimately those taxes are passed on to the entity’s customers, shareholders, and employees. He is correct. When a business must pay a tax, it must recoup what it paid. It can select among one or more of the three options Tom mentions. It can raise prices. It can absorb reduced profits, which ultimately causes the return to shareholders or owners (in terms of dividends or stock or ownership value). It can refrain from raising employee compensation or raise it by less than it would have increased it in the absence of the tax.

Tom suggests that “If, in an ideal world, we had a zero tax rate on business income, as a consumer you would pay lower prices, as an employee you would earn more, and as an investor you would enjoy higher returns. Sounds great, doesn’t it? Except you’d also be paying higher taxes on your higher income and higher investment returns.” That’s true. He then adds, “But there would still be a net gain because of economic efficiencies gained through reduced compliance costs.” It is on this point that I want to comment about the incidence of taxes if business were not taxed.

I can best illustrate my point by posing a simple hypothetical. Suppose a taxing jurisdiction raises its revenue through a real property tax (though admittedly that’s not the ideal form of revenue generation but it works for purposes of the illustration). The jurisdiction has a 1,000 adult taxpaying citizens and two businesses. The value of Business One’s real property is $15,000,000. The value of Business Two’s real property is $10,000,000. Each of half of the citizens own real property worth $100,000. Each of the other half owns real property worth $50,000. For simplicity sake, I will assume all citizens are unmarried. Likewise, I will assume that all of the businesses’ owners, customers, and employees are citizens of the jurisdiction.

The jurisdiction provides one service, which is fire protection and fire fighting. All other services are provided by the larger jurisdiction, such as a state or county, in which the illustrative jurisdiction is situated. The cost of this fire protection and fighting service is $3,000,000.

The first alternative is based on the premise that only individuals pay taxes. Thus, the $300,000 is imposed on the real-property-owning citizens as follows. There is $75,000,000 of real property owned by the citizens (500 citizens x $100,000 plus 500 citizens x $50,000 [$50,000,000 plus $25,000,000). To raise $3,000,000, the real property tax rate needs to be 4 percent. So each property owner with a property worth $100,000 pays $4,000 real property tax, and each property owner with a property worth $50,000 pays $2,000 real property tax.

The second alternative includes the two businesses in the computation. In this instance, the taxable real property value includes both the $75,000,000 of real property owned by the individual citizens and the $25,000,000 of real property owned by the two businesses, for a total of $100,000,000. Now the real property rate drops to 3 percent. So each property owner with a property worth $100,000 pays $3,000 real property tax, each property owner with a property worth $50,000 pays $1,5000 real property tax, Business One pays $450,000, and Business Two pays $300,000. The two businesses can pass the taxes on to their owners, customers, and employees.

Is there a difference in what is called the incidence of the tax? Yes. Consider citizen A and citizen B, each owning a $100,000 property. Citizen A buys twice as much product from the two businesses as does citizen B. Under the first alternative, the two citizens bear the same burden of the tax, but under the second alternative citizen A bears a higher burden; the exact difference depends on how much of the real property tax paid by the businesses is passed on to customers rather than owners or employees. Or consider citizen C and citizen D, each owning a $100,000 property. Citizen C is employed by one of the businesses. Citizen D is retired. Under the first alternative, the two citizens bear the same burden of the tax, but under the second alternative citizen C bears a higher burden; the exact difference depends on what citizen C’s employer decides to do with respect to employee compensation.

The point is that the service for which the jurisdiction charges a tax has value to the businesses that benefits customers, owners, and employees in a proportion that is different from the proportion of real property owned by individuals. The same point can be made for other types of taxes used by the jurisdiction to fund the fire department but the computations are much more complicated.

The underlying problem is that the jurisdiction chooses to fund the fire department through taxes. Would it not be much better to fund the fire department through user fees based on the value of the protected properties. Of course, user fees are passed along to customers, owners, and employees. Does that or should that raise the same concerns about taxes that are passed along? No. Businesses pay other costs, such as utilities, insurance, security, and similar services. The costs of those services are passed along to customers, owners, and employees. They are the ones who should bear the burden of those costs.

Though not everything that taxpayers receive in exchange for paying taxes can be converted into a user fee, if user fees are adopted for everything that can be financed by a user fee, then the amount of taxes paid by businesses that are passed along to customers, owners, and shareholders is reduced because businesses would be paying fewer taxes and more user fees.

What about people who cannot afford to pay user fees? Presumably those people also face challenges paying taxes. Dealing with that problem requires examining a wider set of policies than simply taxation. It requires analysis of compensation issues, minimum wage amounts, the allocation of health care costs, and poverty reduction efforts, which in turn involves analysis of education opportunities, identification, prevention, and cure of mental health problems, elimination of domestic violence, and crime deterrence.

Incidentally, I chose fire protection and fire fighting services for a reason. Some might argue that it’s not the best example because many jurisdictions rely on volunteers and voluntary contributions to fund raising campaigns. Those days are rapidly passing into history. There is a nationwide crisis, as the number of volunteers decrease significantly, because deaths and retirements exceed new additions. The costs of equipment and training continue to rise, so many jurisdictions are facing the prospect of needing to fund their fire departments. This provides an opportunity to consider enacting user fees rather than taxes.

Reader Morris asked me an important question. It is important because it provides an opportunity to explain how a change in facts can and should change thinking.

Reader Morris pointed to a commentary I wrote back in August of 2004. In Equitable Taxation, after explaining why user fees are more appropriate in some instances than the federal income tax, I noted, parenthetically, “(Yes, I know that privatization of many government functions makes sense, and would shift charges from a "user fee" to a mere "private sector price" but I don't want to stray into that discussion at this time.)” Morris then pointed to my commentary in December of 2023, Should (Will) Implementing the Mileage-Based Road Fee Cause Privatization of Highway Infrastructure?, in which I wrote, “What I do not support is the privatization of government functions,” citing multiple posts in which I explained my reasoning. Those posts reached back to 2010.

Reader Morris phrased his question as an observation: “It appears that your position on privatization of government services has changed from 2004 to 2023.” He is correct. It did.

In Should (Will) Implementing the Mileage-Based Road Fee Cause Privatization of Highway Infrastructure?, I explained:

There are several principal reasons that I oppose putting public functions into the hands of those who control the private sector.

First, public-private partnerships don’t work out well, [citing a number of my commentaries dating back to 2010]. These posts pointed out failures in places like San Diego, Orange County, and South Carolina. The failure list grows, and now includes arrangements that did not work for the Interstate 69 project in southern Indiana, and the Pocahontas Parkway in Virginia. From the searching that I undertook, it appears that the problem is a global one and not limited to the United States.

Second, when public functions are re-routed into the hands of private sector businesses, voters lose the ability to control, vote out, or do much of anything with respect to the private entities now running government functions. It is a regression from democracy to a blend of feudalism and authoritarianism.

Third, these arrangements contribute to the corruption of government. They are the product of legislative attempts to find funding without raising taxes while generating revenue for their private sector donors, with hopes that the outcry against tolls and similar charges will be directed against the private entity involved in the project. When things go wrong, legislators don’t react because they perceive themselves at risk of losing funding from the favored private entities and thus at risk of losing the next election, something on which they focus too much.

Aside from the long-term disadvantages of privatizing public functions, the arguments offered in support of that path are flawed. To argue that privatization is “a concept supported by numerous studies showcasing the efficiency and performance improvements possible through transparent and well-structured public-private partnerships,” totally ignores the repeated failures, perhaps because from the viewpoint of the companies and individuals collecting public funds not only find these partnerships to be a success for themselves but manage to persuade everyone else that the success of these private sector participants translates to success for everyone, which is the opposite of reality. The claim that “The private sector has a proven track record of driving innovation in transportation safety” is hilarious when one considers the track record of the private sector when it comes to safety. Aside from noting the Corvairs and Pintos of the world, it has been government that has compelled the implementation of safety features and insisted on recalls due to flawed manufacturing despite the sing-song of the anti-government crowd that chants “we don’t need no regulation.” Yes, you do.

The claim that “Extending this partnership to infrastructure allows for the implementation of cost-effective technologies, ultimately making our roads safer and more efficient” ignores the reality that even if the roads are made safer and more efficient, a questionable claim in and of itself, it makes voter control more difficult rather than more efficient, it funnels public money into the hands of private individuals and companies, and in the long run it increases the cost to the public of using highways, bridges, and tunnels to levels higher than they would be if there weren’t a need to generate profits for those private individuals and companies.

It is sad and alarming that, yet again, when a good idea in the public sector begins to gain traction, the wealthy who yearn for even more wealth, and their acolytes, turn their thoughts into how they can milk more money from the proposal. Enough with the outsourcing of government to privateers.

What changed my mind? Facts changed. The theory of privatization met the practical reality of greed, corruption, and incompetence.

What led me to think, back in 2004, that privatization could and would work? The few instances of privatization that I had observed had persuaded me that moving those government functions into the private sector worked, and supported the proposition that many more could similarly work out as well. Here is an example. In high school I worked at a service station, which, among other things, provided state vehicle inspections. The state required that vehicles meet specified safety requirements but let vehicle owners choose a private enterprise (mostly dealerships and service stations) to do the inspections. These enterprises were licensed and inspected by the state’s Department of Motor Vehicles. Vehicle owners had choice. Mechanics and service station operators had business opportunities, with the job creator being the state. Unhappy customers had recourse, with various avenues of recourse if they were dissatisfied with the service. During those years, a neighboring state had similar safety requirements (for all I know, they could have been identical), but required vehicle owners to visit a state owned and operated inspection facility where, as I was told and read, vehicle owners were served first-come, first-serve, without the opportunity to make appointments and thus sitting in lines for hours (all of that has since changed in that state). In that state, there wasn't the blend between government and private sector control that was found in the Pennsylvania system. Unfortunately, that blend isn’t found in the privatization proposals and projects popping up in the twenty-first century. When I explore the many failures of privatization projects, the lack of that blended control stands out.

It's a different situation when a private-public partnership arises from public involvement in what would otherwise be a private sector project. Those private-public partnerships don’t involve private sector takeovers of public functions. Of course, those sorts of partnerships are disliked by those who prefer the ones that not only reject government involvement in private projects but also want to push government out of public functions. So, something that is a private-public partnership is not necessarily deserving of criticism. It depends on which functions are being shifted.

As I re-read what I wrote in 2023, I recognized that it built on what I had written in those commentaries starting in 2010. I saw the blended public-private control of limited private sector involvement slowly shift to increasing amounts of private control. Worse, that private control did not sit in the hands of thousands of middle-class mechanics and service station operators but in the hands of the oligarchs. The more I re-read what I have written the more I realize that the signs were there, as long as a decade and a half ago, that left unchecked, as it has been, the trend would bring us to where we are now and worse, where we appear to be heading. So yes, when the facts changed, my thinking changed.

It is well settled tax law that pets cannot be claimed as dependents for federal income tax purposes. One need only read Internal Revenue Code section 152 to understand that dependents must be humans. Similarly, the costs of caring for a pet, including veterinary visits, food, training, boarding, grooming, and supplies, are deductible only under very limited circumstances. The costs associated with a service animal or emotional support animal are deductible as medical expenses. The costs associated with an animal used in a trade or business, such as a horse used in a horse riding business or a guard dog, are deductible as trade or business expenses. The costs associated with fostering an animal are, under the right circumstances, deductible as charitable contributions. The costs of moving a pet incurred by certain members of the military under a narrow set of facts also are deductible. Fitting within one of these narrow sets of facts is critical to obtaining the deduction.

So it was rather surprising to see a facebook reel that states: "If you're an animal lover you're gonna wanna hear this in 2025 the IRS is allowing certain tax deductions for your pet so for example money you spend on boarding or grooming going to the vet food or transporation for your dog make sure you take advantage of these tax benefits in 2025." This advice is simply wrong. It fails to explain that the deductions are available only in situations that fit within the aforementioned limited circumstances.

Is it possible that the reel was cut short? I don't think so, because the ending of the message fits a typical closing without any indication that any clarification will follow.

Is it possible that the reel reflects the unfortunate cultural phenomenon of sound bites, tweets, and other unnecessarily shortened and oversimplified summaries? That certainly could be the case. Too often people mention a general rule as though it has no exceptions, or offer a conclusion without sharing the predicates.

What will happen to people who watch this reel and proceed to take deductions for their pets that are not allowable? If they are caught by the IRS or a state Revenue Department, they face not only a tax deficiency but also interest and penalties and in some instances even the risk of criminal prosecution. Unfortunately, with the anti-tax crowd ripping apart the IRS, the chances of being caught are very low, though the same cannot necessarily be said about state Revenue Departments.

It's not just tax advice that should not be taken as correct simply because it shows up on the internet. The same can be said of assertions, claims, advice, and explanations found on the internet with respect to every possible topic imaginable. There is no substitute for independent research, critical thinking, and reliance on vetted professionals in every instance where the question is of paramount importance.

It’s time once again to visit the mileage-based road fee. I have written about it on numerous occasions, in posts such as Tax Meets Technology on the Road, Mileage-Based Road Fees, Again, Mileage-Based Road Fees, Yet Again, Change, Tax, Mileage-Based Road Fees, and Secrecy, Pennsylvania State Gasoline Tax Increase: The Last Hurrah?, Making Progress with Mileage-Based Road Fees, Mileage-Based Road Fees Gain More Traction, Looking More Closely at Mileage-Based Road Fees, The Mileage-Based Road Fee Lives On, Is the Mileage-Based Road Fee So Terrible?, Defending the Mileage-Based Road Fee, Liquid Fuels Tax Increases on the Table, Searching For What Already Has Been Found, Tax Style, Highways Are Not Free, Mileage-Based Road Fees: Privatization and Privacy, Is the Mileage-Based Road Fee a Threat to Privacy?, So Who Should Pay for Roads?, Between Theory and Reality is the (Tax) Test, Mileage-Based Road Fee Inching Ahead, Rebutting Arguments Against Mileage-Based Road Fees, On the Mileage-Based Road Fee Highway: Young at (Tax) Heart?, To Test The Mileage-Based Road Fee, There Needs to Be a Test, What Sort of Tax or Fee Will Hawaii Use to Fix Its Highways?, And Now It’s California Facing the Road Funding Tax Issues, If Users Don’t Pay, Who Should?, Taking Responsibility for Funding Highways, Should Tax Increases Reflect Populist Sentiment?, When It Comes to the Mileage-Based Road Fee, Try It, You’ll Like It, Mileage-Based Road Fees: A Positive Trend?, Understanding the Mileage-Based Road Fee, Tax Opposition: A Costly Road to Follow, Progress on the Mileage-Based Road Fee Front?, Mileage-Based Road Fee Enters Illinois Gubernatorial Campaign, Is a User-Fee-Based System Incompatible With Progressive Income Taxation?. Will Private Ownership of Public Necessities Work?, Revenue Problems With A User Fee Solution Crying for Attention, Plans for Mileage-Based Road Fees Continue to Grow, Getting Technical With the Mileage-Based Road Fee, Once Again, Rebutting Arguments Against Mileage-Based Road Fees, Getting to the Mileage-Based Road Fee in Tiny Steps, Proposal for a Tyre Tax to Replace Fuel Taxes Needs to be Deflated, A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee, Another Example of a Problem That the Mileage-Based Road Fee Can Solve, Some Observations on Recent Articles Addressing the Mileage-Based Road Fee, Mileage-Based Road Fee Meets Interstate Travel, If Not a Gasoline Tax, and Not a Mileage-Based Road Fee, Then What?>, Try It, You Might Like It (The Mileage-Based Road Fee, That Is) , The Mileage-Based Road Fee Is Superior to This Proposed “Commercial Activity Surcharge”, The Mileage-Based Road Fee Is Also Superior to This Proposed “Package Tax” or “Package Fee”, Why Delay A Mileage-Based Road Fee Until Existing Fuel Tax Amounts Are Posted at Fuel Pumps?, Using General Funds to Finance Transportation Infrastructure Not a Viable Solution, In Praise of the Mileage-Base Road Fee, What Appears to Be Criticism of the Mileage-Based Road Fee Isn’t, Though It Is a Criticism of How Congress Functions, Ignorance and Propaganda, A New Twist to the Mileage-Based Road Fee, The Mileage-Based Road Fee: Simpler, Fairer, and More Efficient Than the Alternatives, Some Updates on the Mileage-Based Road Fee, How to Pay for Street Reconstruction, Stop the "Stop EV Freeloading Act" Because The Mileage-Based Road Fee Is a Much Better Way to Go, Why Is Road Repair and Maintenance Funding So Difficult for Public Officials to Figure Out?, Should (Will) Implementing the Mileage-Based Road Fee Cause Privatization of Highway Infrastructure?, The Freedom Caucus Doesn’t Understand that the Mileage-Based Road Fee is “PRO-Freedom,” Not the Opposite, A Mileage-Based Road Fee by Any Other Name?, and Does the Mileage-Based Road Fee Work for Local Road Maintenance?

Today reader Morris alerted me to a development in Washington state with respect to a proposed mileage-based road fee. According to this report, bills have been introduced in both the Washington Senate and the Washington House to impose a vehicle miles traveled tax, a different name for a mileage-based road fee, though using the word tax is disappointing because what is being considered is in most respects a user fee. Reader Morris directed my attention to two previous commentaries, both arising from reports he noticed and shared with me, dealing with similar proposals in Washington, Getting Technical With the Mileage-Based Road Fee and A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee.

Reader Morris asked me two questions. He asked, “Does the proposed legislation solve the problems mentioned in [those two commentaries]? He also asked, “What do you think about this proposed legislation?”

I answer the first question in two steps. First, in a href = https://mauledagain.blogspot.com/2020/02/#5924033084063958184>A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee I didn’t mention problems. I explained that the Washington State Transportation Commission had released a studying “the feasibility of transitioning from the gas tax to a road user assessment system of paying for transportation.” I noted that “It’s time to acknowledge that it’s time for change.” Second, it’s in Getting Technical With the Mileage-Based Road Fee that I criticized legislation that was at that time proposed in Washington. I criticized plans to use a portion of mileage-based road fees for purposes other than those stated in the Eighteenth Amendment to the Washington Constitution, which requires that all license fees, fuel excise taxes, and other highway revenue be used “exclusively for highway purposes.” I noted that:

The overriding issue is not one restricted to the use of revenues generated by a mileage-based road fee. It is an issue that affects every tax or user fee enacted by a legislature other than, perhaps, taxes destined for a “general fund.” To make certain that the revenues from a mileage-based road fee are not diverted as has happened with gasoline tax revenues and other user fee revenues, those drafting the implementing legislation must be certain to restrict the uses of those revenues. For Washington state, and other jurisdictions with similar restrictive language, the concern is that the 18th amendment does not apply to mileage-based road fees. That means an amendment to the amendment is necessary, though perhaps the same outcome could be accomplished by inserting expenditure restrictions into the enacting statute. I don’t know Washington constitutional law well enough to conclude what specifically would need to be done. As the writer of the News Tribune article put it, “State lawmakers, therefore, shouldn’t mess around with a mileage tax unless they have a parallel discussion about preserving the original intent of the gas tax.” I totally agree.

The most recent proposal attempts to circumvent the limitation in the Washington Constitution by adding a ten percent surcharge to generate funds for other purposes. It seems to me that the surcharge is nothing more than breaking the fee into two components, re-labeling the ten percent portion as something else, and then funneling monies paid by road users to other purposes. As I have pointed out many times, it’s one thing to impose taxes to generate monies for general funds, but it’s a very different, and improper, approach to charge people a user fee for something they are not using. Imagine setting up a municipal landfill and charging 10 cents for every pound of refuse deposited and another 15 cents per pound that is used to pay for snow removal. If snow removal is going to be funded by a separate fee it ought to be imposed on everyone who benefits from snow removal, which is a group much larger than those using the landfill. So, no, the proposed legislation does not solve the diverted funds problem.

To the second question, I reply that in general I support any steps to shift from fuel taxes to mileage-based road fees. If some changes are made, the proposed legislation is a good starting point. Some people are criticizing the proposed legislation as a violation of privacy because it requires reporting mileage to the state either by odometer readings or GPS tracking. Reporting odometer readings does not violate privacy. Many, perhaps all, states require those readings each time vehicle registration is renewed. They also require reporting of insurance coverage information, including the name of the insurance company and the policy number. It appears that what concerns people is the use of GPS tracking. I suppose the reason for including it in the legislation is a lack of confidence in self-reported odometer readings, though odometer readings are also taken when vehicles undergo state safety inspections and thus there is a check on misreported readings. GPS tracking would be an almost necessity if states limited the fee to miles driven on state roads and imposed the fee on out-of-state vehicles but that fine-tuning requires a national compact that isn’t yet close to fruition. To deal with privacy concerns, some states let private companies run the mileage-based road fee programs, but that doesn’t solve the privacy issue because it puts data in the hands of non-accountable private sector operators rather than in the hands of government personnel who ultimately are subject to accountability at the ballot box. The Washington proposal would permit law enforcement to access “personally identifying information reported” through court order, but it’s unclear what information would be available that isn’t already available, as even GPS information can be obtained by court order. So the surcharge needs to be jettisoned, and the collection and sharing of information needs to be redesigned so that abuses are foreclosed.

So again we wait to see what happens.

I have been a teacher for a very long time. I shared this story 16 years ago in How and Why I Became a Law School Professor. What I did not explore in that blog post was something that I did not, until now, feel compelled to add to the story.

Throughout my life I have known and spoken with many teachers. I have had discussions with those who taught me, friends and relatives who are or have been teachers, former students who are or have been teachers, and colleagues, neighbors, and others who are or have been teacehers. The are people who taught not only law school and undergraduate classes, but also K through 12 classes. When I heard their stories, I realized I was lucky. I was spared most of the challenges they faced.

I was forutunate that in all of my teaching situations, almost all of the students I encountered wanted to learn. Few were being educated against their will. Almost all of them were capable of learning what they were studying, though some did so easily and some needed to make much more of an effort. More than a few grumbled, but many of those students, months or years later, took the time to explain that they finally understood what was required of them to learn. These are some of the joys of teaching, helping those who want to learn accomplish what they set out to do.

But there are sorrows in teaching. In my formal and informal teaching roles over the years, I rarely encountered someone who did not want to learn. But most of the teachers I have known, particularly those in the K-12 schools, have not had the comfort of trying to educate people who want to learn. They must deal with those who don't want to learn because they'd rather spend their time playing or doing things that get them into trouble. Whether they are that way because they are being wilful or because they are dealing with emotional or other issues doesn't remove the challenge, though it can affect how the challenge is met. Many of these teachers also encounter students who lack the requisite abilities, often because they are misplaced in terms of grade level or curriculum, either through school system flaws or, worse, parental denials of reality.

The impetus for this post is the culmination of what I have read and observed over the past 15 years. It seems to me that a disppointing number of people do not want to learn. Many of those people have the capability to learn but choose not to make the effort. Some lack the desire to think for themselves, and many lack the ability to think for themselves. Perhaps some never had the opportunity to learn to think for themselves, having been through a limited education process of receiving and regurgitating words and paragraphs. Others had that opportunity but chose to let it slide by, choosing instead to cut class, ignore homework, cheat, and use parental influence to obtain approvals of which they were not deserving.

Why does this matter? It matters because the inablity to think for one's self causes a person to be more susceptible to misinformation, lies, scams, the wiles of con artists, and the propaganda of domestic and foreign adversaries. Those who pay attention to what is now happening and who have and use the ability to think for themselves surely can see the consequences of failing to think for one's self, failing to distinguish between fact and opinion, and failing to analyze allegations and information.

The ability and willingness to learn is what has fueled the evolution of the species. It is what generates progress, a word that meets antipathy when expressed as its adjective. Its absence generates the opposite, the adjective formed from the verb regress. And that is what is going to happen if society fails to persuade itself that education matters, that the ability to engage in analysis is important, and that the ability to think for one's self is essential.

I don't regret having been a teacher for a long time. I do not regret having spent a good part of my life engaged in education. I do regret that what I and others have been doing will turn out to have been insufficient to prevent society from backsliding into what some of us thought had been put behind us.