MauledAgain

A few months ago, in If You Want a Professional Sports Team, Pay For It Yourselves; Don’t Grab Tax Dollars, I criticized a major league soccer ownership group for trying to get taxpayers in St. Louis and in Missouri to foot part of the bill for the construction of a soccer stadium. This was not the first time I pointed out the greed of multimillionaire and billionaire professional sports franchise owners trying to get other people to provide free funding for their assets. Aside from the foolishness of asking the poor and middle class to funnel even more money into the pockets of the wealthy, these deals trigger a stream of tax funding requests to keep these arenas and playing fields in good condition.

Cuyahoga County is now dealing with the consequences of having agreed to funnel tax dollars into Cleveland’s professional sports teams. According to this report, the teams want repairs and major renovations to Progressive Field and Quicken Loans Arena. County officials explained, however, that they cannot sell bonds to provide financing because sin tax revenue, which secures these sorts of bonds, is insufficient to meet the demands of the teams. What sin tax money is available under the current arrangement is far short of what the teams want. A contributing factor is the use of a sizeable portion of sin tax revenue to service interest and principal payments on bonds issued last time the teams came begging at the public tax well. The well has run dry.

The Cleveland Indians “want $8.5 million to replace all the seats.” The Cleveland Cavaliers “want $17.7 million to replace the heating, cooling and ventilation systems.” The lists of requests from the three teams are long, and can be found in the report cited in the previous paragraph. The lists are long, and the dollar amounts attached to the desired items are far from trivial.

The solution is simple. The teams can pay for their wish-list items by using their own funds. If they don’t have enough funds, they can raise ticket prices and negotiate better television deals. They can reduce player salaries, which are absurdly high, orders of magnitude beyond what is earned by the working folks who not only shell out dollars for tickets and as part of the purchase price of products advertised on sports programs to fund those television contracts, but who also are paying taxes. If none of that works, then shut down the team. That’s what business owners do when their revenues dry up or expenses soar, particularly when technology and culture change. The reality is that the owners don’t want to dip into their multi-million dollar and billion dollar reserves. To paraphrase what I said a few months ago, if you want to upgrade your professional sports team or the facilities in which it plays and practices, pay for it yourselves, and don’t go grabbing tax dollars from people who are orders of magnitude less economically situated than you are.

Sometimes people decide to do something nice, in a monetary way, and then discover that there is no tax benefit for doing so. If there is a tax benefit, it exists for the recipient of the gesture. For example, a person who makes a gift to a friend or relative is not permitted to deduct the gift for income tax purposes, and thus does not obtain any tax benefit. The donee, however, escapes paying tax on the increase in economic wealth because section 102 excludes gifts from gross income. Those are basic principles of federal income taxation with which any diligent student in the introductory federal income tax course is familiar.

What happens, however, when someone makes a monetary transfer that is difficult for many people to view as a gift, but that is not a transfer the person is obligated to make? An excellent example is one that recently popped up again, and was the subject of the Tax Court’s decision in Bulakites v. Comr., T.C. Memo 2017-79. The taxpayer and his wife legally separated and, a year later, divorced. Under the separation agreement, the taxpayer was required to pay his former wife $2,000 per month for spousal support until their home was sold. At that point payments would increase to $8,000 per month. Because the real estate market was moribund, the house stayed on the market, and eventually its value dropped to less than the mortgage balance. The taxpayer testified that in order to do “the right thing,” he agreed with his former wife to increase his payments to $5,000 per month. They did not amend the written separation agreement. Though the taxpayer didn’t always send $5,000 each month to his former wife, he did send her more than the required $2,000 per month.

The taxpayer deducted as alimony the total amount he paid his former wife. The IRS disallowed the portion of the deduction that exceeded $24,000. The dispute ended up in the Tax Court, which held in favor of the IRS. The court pointed out that in order to be deductible, alimony must be paid under a divorce or separation agreement, which is defined by the Internal Revenue Code as a decree of divorce or separate maintenance or a written instrument incident to that decree, a written separation agreement, or a decree requiring a spouse to make the payments. An oral modification does not qualify because it is oral and not written. The kindness of the taxpayer had no value for tax purposes.

The only silver lining in this unhappy outcome for the taxpayer is that his former wife is not required to pay tax on the additional amounts the taxpayer paid to her. The court did not mention this aspect of the arrangement, because the former wife was not a party to the litigation. It is unknown whether she reported the entire amount she received or only $24,000, though my guess is that she reported only the $24,000. If she did report more, and happens to learn of her former husband’s tax outcome, she should move quickly to amend her return.

The additional payments are very much like a gift, and the tax consequences match those applicable to gifts, but it would be a bit awkward to refer to the payments as gifts. It is unlikely that the taxpayer was acting with “detached and disinterested generosity,” the benchmark usually applied to the determination that a transfer constitutes a gift. Though he was trying to do “the right thing,” it would not be surprising to learn that he was also concerned about his former wife challenging him with respect to the delay in the sale of the property and that he concluded making additional payments would buy some time.

It is unclear why the taxpayer and his former wife did not execute a written amendment to their separation agreement. Perhaps she did not want to report additional income. But what is more likely is that the two of them simply didn’t see the need to write anything down. The failure to put oral agreements into writing has been the pitfall of more litigants than one can easily count.

It isn’t all that terrible, I suppose, that the tax law doesn’t always award someone for being nice, despite the existence of the charitable contribution deduction. One hopes that people would be nice for reasons other than a tax incentive to do so. The monetization of kindness is an unkind quality.

If my blog post from last Friday, Taxes, Strip Clubs, and Creativity had been a podcast, I’d now be saying, “I had to go and open my big mouth.” But instead, I’ll simply settle for mentioning my irrepressible keyboard.

On Friday, I commented on a story shared with me by a reader, in which a strip club in New York unsuccessfully, at least so far, tried to avoid the sales tax on revenue collected from customers, by arguing that its dancers were therapists, bringing its services within the therapy exception to the sales tax. I noted that in earlier posts I had described the partially successful attempt by another New York strip club to escape the sales tax by branding its services as “a dramatic or musical arts performance.” I observed that the lawyers representing these clubs were quite creative, and suggested that perhaps they would work their way through the sales tax exemption list. I asked, “How long until the strip clubs argue that they are offering educational services?”

About an hour after the post appeared, the same reader pointed me to another story. Granted, it wasn’t an attempt to escape the sales tax, but it did involve taxes, education, and strip clubs. I suppose I would have found this story had I pursued a google search for those terms. As restrained as I tried to be, sometimes the inevitable is inevitable. According to this story from seven years ago, “Lap dances just got more educational.” According to the report, dancers from yet another New York strip club rallied at the courthouse in support of a pole tax to fund local schools. The club intended to start charging an entry fee which it planned to send to the state revenue department. According to one of the dancers, “We just want to give back to our communities.” Incidentally, the dancers were supporting a pole tax, not a poll tax, which is an entirely different sort of tax, one that when applied to voting has been outlawed, though I am confident there are some people who would dance with delight if it were revived, though it would take an amendment to the Constitution to do that.

The nation’s highways, bridges, and tunnels are in need of major repairs and reconstruction. The sticking point, as is the case with just about everything that the nation and its people need, is funding. When it comes to highways, my preferred method of funding is the mileage-based road fee. I have written about the mileage-based road fee many times, beginning with Tax Meets Technology on the Road, and continuing through 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?, 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, and If Users Don’t Pay, Who Should?.

Now comes some good news and bad news. According to this report, South Carolina has increased its state gas tax to pay for badly needed road repairs. That’s the good news. The bad news is that the enactment required the state senate to override the veto of a governor who takes the position that the federal government should pay for the repairs, along with proceeds from the issuance of bonds. Why is that bad news?

There are three reasons that the governor’s position is bad news. First, the federal government is unlikely to hand out the amount of money that is required, and to do so must either increase taxes – something that South Carolina’s governor and his political party oppose as a matter of principle – or increase the federal budget deficit – something that the South Carolina’s political party claims to oppose though it certainly is willing to overlook its principles when it comes to political expediency. Second, using state bonds to finance road repairs increases the cost of the repairs because not only must the bonds be repaid, but interest also must be paid. Third, the repayment of state bonds would come out of the general fund, which means all taxpayers would be bearing the cost of something that benefits motorists. As I stated in If Users Don’t Pay, Who Should?, “I support the mileage-based road fee because I think that, where possible, users of services should pay for those services, and those who, for good reason, are unable to pay for essential services should receive assistance in receiving those services.” What South Carolina has done, though not as optimal as a mileage-based road fee, is much better than doing nothing. In the long run, the tax increase will cost motorists much less than the cost of vehicle repairs, injuries, and deaths caused by highway infrastructure neglect.

If asked which industries are most likely to get caught up in tax disputes, it would be a safe guess that the folks operating strip clubs would be on the list. Almost four years ago, in Lap Dance Tax?, I first wrote about the attempt by Philadelphia to impose its amusement tax on fees paid for lap dances. I continued the saga in Tax Review Board Strips City’s Lap Dance Tax Attempt, Philadelphia Lap Dance Tax Effort Bumped Up to Court, Which Grinds It Down, and The Lap Dance Tax Dance Marathon. Ultimately, the city of Philadelphia lost. Almost two years ago, in The Return of the Lap Dance Tax Challenge, I described a New York decision in which a judge held that New York’s sales tax did not apply to amounts collected from customers to observe pole dancing because pole dancing fit within the sales tax exception for “a dramatic or musical arts performance,” but did apply to amounts collected for lap dances because laps dances lack “artistic merit.” I explained that I would have struggled with the case because “as others can attest, I don’t quite understand art.” I elaborated by noting, “I don’t understand why something is or is not art, and have concluded, perhaps erroneously, that I some sense everything is art.”

A few days ago, a reader turned my attention to a story about another New York strip club that unsuccessfully offered another attempt to avoid sales taxes. The club argued that its dancers were providing therapy to its customers, and thus the amounts charged fit within the sales tax exception that applies to amounts paid for massage therapy or sex therapy. The state, not surprisingly, argued that the services constituted entertainment and thus the amounts paid for the services were equivalent to an admission charge and thus subject to the sales tax. The court rejected the club’s position, and held that the amounts in question were subject to the sales tax.

Perhaps I understand therapy more than I understand art, but that’s not a proposition I can defend with any confidence. It seems to me that, in some way, all sorts of things can be therapeutic. The sales tax applies to movie ticket sales, yet watching a movie is, for many people, therapeutic. The same could be said of most forms of entertainment to which the sales tax applies. In states where the sales tax applies to food, clothing, and shoes, is there not an argument that food, and shopping for clothes and shoes, is something that many people find therapeutic? For those who think tax is simply a matter of numbers that a robot can handle, here is a question that doesn’t involve mathematics: where does one draw the line between activities that are therapeutic and those that are not?

The attorneys who argue that strip club activities constitute art and therapy surely are creative. I can imagine that they have been reading through the extensive list of sales tax exceptions, and pondering how, if at all, their clients’ businesses fit within any of those exceptions. What’s next? In New York, sales of educational services are exempt. How long until the strip clubs argue that they are offering educational services?

It can boggle one’s mind. A member of Congress has proposed legislation, the “Lifetime GI Bill Act,” which, among other things, would require members of the military to pay $100 per month for the right to access education benefits after separating from the service. As described in a variety of articles, including this one from the Military Times, the idea faces strong opposition. The Commander of the Veterans of Foreign Wars called it a “new tax on troops.” Is it a tax? Perhaps. Technically, it is a fee. It is a proposal to compel veterans to pay for a portion of the cost of the education that they are provided as part of the compensation earned for serving in the Armed Forces. The amount in question is a significant amount. Though for the wealthy, $100 per month is at best petty cash, for an entry-level member of the service earning between $17,000 and $20,000 per year, it cuts deep into take-home pay. Though one opponent referred to the proposal as another example of Congress “nickeling and diming America’s service members and veterans,” it’s much more than a nickel and dime imposition. It’s a big paper currency from the wallet deal.

The proposed fee would generate $3.1 billion in revenue over ten years. The current cost of providing education benefits to veterans is $10 billion per year. So what’s the point of charging the fee? It’s simply a way to raise revenue while holding firm on the “tax cut” mantra that afflicts the nation.

Seven years ago, the member of Congress who offered this proposal explained, “Allowing our workers and families to keep more of what they earn and save - while giving entrepreneurs and smalls businesses incentives to grow - are the best ways to stimulate the economy.” If he truly believes this, why look for revenue among some of the least well-compensated members of society?

Oddly, proponents of the plan claim that by charging members of the military for benefits that have been, and should be, part of their compensation package would strengthen those benefits against future attempts to curtail the benefits. That is nonsense. Nor is it clear that this amount of revenue is require to fund the smattering of miniscule benefit adjustments also provided in the draft legislation. What the plan does accomplish is to make it easy to shift increasing amounts of the benefit’s cost to active and retire military members, by raising the monthly fee from $100 to whatever suits the members of Congress who want to raise revenue to offset deficits enlarged by cutting taxes for people who take home more in a day than servicemen and servicewomen take home in a month or a calendar quarter.

Though I’m not into reality television shows, I do enjoy watching television court shows. They are, in many ways, a form of reality television, so perhaps my rejection of reality television isn’t so much a rejection of reality television per se, but a rejection of what, to me, is boring reality television. The court shows are anything but boring. They’ve provided me with a long parade of opportunities to comment, when tax issues pop up, including 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, and Judge Judy Almost Eliminates the National Debt.

Several days ago Judge Judy heard a case involving a plaintiff and defendant who were in a relationship, had a child, and when the child was about a year old, decided to go on vacation to Italy. The plaintiff made deposits, and the two parties purchased trip cancellation insurance. The plaintiff made additional payments as the date of the vacation approached. Unfortunately, the child became ill, and the parties cancelled the vacation. The trip insurance company paid each party $1,100. The plaintiff asked the defendant to reimburse her for her outlays, but the defendant refused. So the plaintiff sued.

Judge Judy asked the defendant why he did not pay the plaintiff the $1,100, considering he had not made any payments toward the cost of the vacation. He explained that he let the plaintiff drive a car he owned. Judge Judy brushed that aside after a brief exchange, and then asked the defendant if he was paying child support. He responded, “I have an order.” Judge Judy interrupted, and said, “I didn’t ask you if you had an order. I asked if you paid child support.” The defendant replied, “Yes.” Judge Judy asked him, “How much child support did you pay last week?” The defendant answered, “Nothing.” Judge Judy asked, “How much did you pay last month?” His reply again was, “Nothing.” He added that he had just gotten his job back two weeks ago. Earlier in the trial he had explained he had worked in his brother’s locksmith business, and was paid in cash, but was laid off because there wasn’t enough work, but was rehired two weeks before the trial. Judge Judy asked, “When you were paid for these two weeks, how much child support did you pay?” His response, “Nothing.”

Judge Judy turned to the plaintiff and advised her, “Contact the IRS. Report his brother for not withholding taxes. That will make it possible for you to go to family court and get his [the defendant’s] wages garnished.” Perhaps because the plaintiff did not respond immediately with an indication of understanding, the judge repeated, “Contact the I [pause] R [pause] S.” Judge Judy announced that judgment would be in favor of the plaintiff for the $1,100. Judge Judy then looked at the defendant and again said, “IRS,” pausing between each letter and speaking more loudly. Presumably Judge Judy figured that the letters “IRS” would give the defendant incentive to meet his obligations.

It’s too bad that the show doesn’t disclose the results of any follow-up information on the cases. Perhaps the producers don’t do follow-ups, though other shows do, or perhaps they do but choose not to publicize the outcomes. I’m curious. I wonder if the plaintiff contacted the IRS. I wonder if the defendant’s wages were garnished.

In a recent commentary, A. Barton Hinkle claims that “Tax cuts won't cost you anything, unless you're Uncle Sam.” He argues that “taxation entails taking the earnings of some people for the benefit of others,” though conceding “We need some level of taxation; government can’t function without it,” but implying through his statement, “But the level should be kept as low as possible,” that the bulk of tax revenues are not necessary for government to function. He begins his commentary with an attempt to draw an analogy with a retail store sale, in which most people would be happy if they discovered that they could purchase something during an “Everything Now 20 Percent Off” sale. He argues that only government suffers from tax cuts, and likens taxation to strangers trying to spend a person’s paycheck.

Hinkle’s commentary is flawed, because it rests on bad theory and woeful practical application. He overlooks some important concepts.

First, his claim that “tax cuts won’t cost you anything” ignores the consequences of the last two rounds of trickle-down supply-side tax cut foolishness. Reagan, at least, recognized the error and persuaded Congress to reverse some of the cuts before the adverse economic consequences produced the same sort of disaster that the Bush tax cuts generated. Rather than creating jobs – because jobs aren’t created unless there is demand and demand isn’t created unless wealth shifts to the consumer rather than the investor – those tax cuts found a home in gimmicks such as bad loans called by different names, hiding places such as offshore tax havens, and secret organizations now well funded to control politics and voting. Indeed, the proposed Trump tax cuts will cost people even more.

Second, his analogy to the retail store sale fails because it compares apples to oranges. Too often, a “sale” is nothing more than a pretext for lowering an artificially high retail price to the actual desired price. Anyone familiar with shopping for automobiles, as well as other products, is well aware that “manufacturer’s suggested retail price” is nothing more than a device that permits sales personnel to earn points by offering generous “discounts.” But even if the sale is a genuine sale and discount, the analogy should be as follows. By cutting profits, or even incurring a loss, the seller runs the risk of going out of business. If that happens, the buyer has little or no recourse if the purchased product is defective and needs to be replaced, or for some reason needs to be returned for a refund, or needs to be serviced when it fails in some manner. In the long-run – a perspective that most tax-cut enthusiasts, the anti-tax crowd, and the anti-government activists are unable or unwilling to consider – it doesn’t help the community of which the purchaser is a part for the retailer to cut revenues.

Third, when Hinkle argues that “taxation entails taking the earnings of some people for the benefit of others,” he projects a one-sided, self-focused analysis of what taxation is and what taxation does. Taxation benefits a taxpayer both directly and indirectly. Direct taxation is easy to understand. The person who pays a gasoline tax used to fix highways benefits from the availability of a road on which to drive. The person who pays a local property tax used to hire police officers benefits from the protection and assistance provided by the local police department. The person who pays an income tax, part of which is used to fund national defense, disease detection and prevention, weather warnings, clean air, and similar benefits is getting something in return. Indirect taxation is a bit more difficult to understand. Taxes paid for the education of others provides the long-term benefit of a citizenry sufficiently capable of contributing to a safe and improved nation. Taxes paid for the medical care of others provides the benefit of preventing, detecting, and suppressing epidemics before they run wild through the taxpayer’s community.

Fourth, Hinkle presumes that the proposed tax cuts will “save you money” but he fails to acknowledge that for many people, the proposed “tax cuts” will increase their federal income tax liability or have no effect. The only people saving any money beyond a few pennies a day are the wealthy, whose addiction to money will not be appeased even when there is no more money for them to grab.

Fifth, by arguing that “the only entity for whom a tax cut could be considered a cost is the federal government,” Hinkle treats “government” as something separate and apart from taxpayers. Yet every government, at least in the democracy that the United States has been, is not a separate thing but a collective representation of everyone within the jurisdiction of that government. If the federal government incurs a larger budget deficit, which it will if the proposed Trump cuts are enacted, the economic burden of those deficits is not borne by some “entity over there” but by all Americans.

Sixth, his analogy to the stranger trying to dictate how someone’s paycheck is spent is yet again another apples to oranges comparison. The better analogy would be the utility company that says, “We want part of your pay to compensate us for the electricity we provided to you.” That’s what happens when taxes are imposed for goods and services provided directly and indirectly. That paycheck is not earned in a vacuum, but is made possible by the social and economic structure safeguarded under the collective protection of government.

In all fairness, Hinkle does make several good points about why tax and economic policy is a mess. He notes that “Republicans don’t care much about deficits unless Democrats are in charge, and vice versa,” as an example of how “partisan hypocrisy enters the equation.” Indeed, the fact that politicians have more loyalty to party and the secret organizations that fund parties and politicians than they do to country and the collective citizenry called government is at the root of current political discord and dysfunction.

Hinkle notes that there is a “high cost of government.” Though the degree to which the cost of government is high can be debated, there is no question that government can reduce costs without reducing benefits. Yet the places in government accused of being inefficient turn out to be far less wasteful than alleged, and the places where waste flows like a river remain sacrosanct because of the vested specific interests of individual elected politicians.

A democracy cannot survive extensive wealth and income inequality. The tool for fighting that inequality is taxation. Though some who are wealthy understand the point, most do not comprehend that once the oligarchy owns pretty much everything, the peasants will have little or nothing to lose. There are lessons to be learned from history, though we are now becoming aware of how woefully ignorant elected politicians are when it comes to history. When matters here and now reach the point they have in the past, perhaps then the value and cost of taxes will be appreciated. But I fear that it will then be too late.

A recent Tax Court case, Wainwright v. Comr.. T.C. Memo 2017-70, provides a lesson in how not to claim a residential energy credit. The taxpayer and his friend worked and lived together. They lived in a home that the friend had purchased before she and the taxpayer met. While they were living together in the home, they refinanced the mortgage as co-borrowers. During 2010 and 2011, the taxpayer lived in the home, paid the mortgage payments, and maintained the property. On his 2010 federal income tax return the taxpayer claimed, among other credits and deductions, a $1,500 residential energy credit arising from the installation of energy-efficient windows and “other energy saving assets” in the property. When the IRS issued a notice of deficiency, one of the items it disallowed was the residential energy credit.

To substantiate the credit, the taxpayer provided an invoice from a local window company, issued to the taxpayer’s friend who also lived in the home. The invoice showed a “contract amount” of $11, 934, a “deposit” of $3,580, and “payments” of $8,354. It showed an “install date” of March 5, 2011.

The Tax Court found that the invoice was insufficient proof of the claimed credit, pointing to several shortcomings. First, it did not describe in any detail what sort of windows were installed. Second, it did not specify the property on which they were installed. Third, the taxpayer’s name was not on the invoice. Fourth, the invoice did not disclose who paid the deposit or who paid the payments. Fifth, and this is the clincher, the invoice stated that the windows were installed in 2011, but the taxpayer claimed the credit on his 2010 federal income tax return.

From time to time, I share my thoughts about the relationship between, on the one hand, road taxes and user fees, and on the other hand, the cost of death, injury, and property damage caused by potholes. I’ve explained the economic sense of collecting user fees to repair highways in posts such as Potholes: Poster Children for Why Tax Increases Save Money, When Tax Cuts Matter More Than Pothole Repair, Funding Pothole Repairs With Spending Cuts? Really?, Battle Over Highway Infrastructure Taxation Heats Up in Alabama, and When Tax and User Fee Increases Cost Less Than Tax Cuts and Tax Freezes.

Estimates vary in terms of what a motorist pays for automotive repairs required when someone runs over a pothole. The American Automobile Association uses a $600 figure, as noted in Analyzing Gasoline Tax Increase Impacts. Others suggest it’s twice that amount. It only takes one blown tire and bent tie rod for someone to learn, quickly, how expensive tires, wheels, suspension parts, and labor can be.

In a recent article, Cassie Hepler of phillyrecord.com explains that there are now more than 35,000 potholes in Philadelphia, an increase of more than 20,000 since four years previously. Before 2012, the city filled almost 13,000 potholes each year. It just can’t keep up. Worse, because potholes are more likely to appear when roads get older, the situation is compounded by the city’s inability to repave as many road miles as it needs to do in order to reduce pothole development. For more than ten years, the city has failed to pave the 131 miles that it sets as the goal to stymie pothole increases. In 2013, the city managed to repave all of 22 miles of roads.

The reason for this problem is easy to identify. The city’s highway budget has fallen from an annual average of $25 million to $18 million. The average cost to fill a pothole is $22. The Independent Insurance Agents and Brokers of America organization has calculated that potholes cause $5.4 billion a year in damage, and I don’t think that includes any sort of price for death and personal injury. Spreading the $5.4 billion over all drivers, the organization concluded that the average driver pays $20 a year because of pothole damage. Put another way, every ten years a motorist will be hit with a $200 repair bill. I think those numbers are low. But even using those numbers, does it not make more sense to pay $5 a year to provide enough funds to ensure that all potholes are fixed quickly and to repave roads so that the number of new potholes is reduced? It’s called insurance and it makes sense.

The anti-tax crowd and the anti-government groups argue that no one should be forced to pay taxes to fund roads or to buy insurance. In one sense, if someone wants to live without insurance, so be it, provided the consequences fall only on that person. Someone without health insurance can self-fund their own care, even though 99 percent of those who claim to self-fund their own care lack the financial resources to do so and end up getting free care at emergency rooms. In contrast, the person who resists fees for road repaving and pothole repairs is forcing other people to incur the risk of death and injury because they are compelling people to use roads that are inadequate.

Of course, lurking beneath the surface is the intent of those who want to privatize highways, so that they can charge ten or twenty or fifty times what it would cost if road taxes and user fees were increased. And when the private company fails to deliver, it and its officers and shareholders cannot be voted out of office. Beware of the profiteers taking advantage of the anti-tax and anti-government sentiments. As bad as public government can be at times, privateers are much worse.

A few months ago, in If You Want a Professional Sports Team, Pay For It Yourselves; Don’t Grab Tax Dollars, I criticized a major league soccer ownership group for trying to get taxpayers in St. Louis and in Missouri to foot part of the bill for the construction of a soccer stadium. I explained that if the project is a good economic deal, then the owners should be more than happy to invest their own money. I explained that if the only way to make the private sector project economically viable is to grab taxpayer dollars, then the project isn’t worth doing. I pointed out that an attempt by the then St. Louis Rams of the National Football League to persuade taxpayer to fund a new stadium for the Rams had failed. I noted, “Apparently the message, that the taxpayers do not want to finance profitable private sector enterprises, did not get through to everyone.”

Now comes a news report that when the voters in St. Louis went to the polls earlier this month, they rejected one of the two ballot propositions that needed to be approved in order for public financing of the proposed soccer stadium to proceed. The proposition that passed is a half-cent increase in the sales tax. The proposition that failed was an increase in the use tax with the revenue dedicated to the construction of the stadium. The report explains that because the first proposition passed and the second failed, the use tax will increase but the revenue will go into the city’s general fund. Turnout for the vote was higher than expected.

Though this is good news, it’s just one small victory in the effort to put an end to wealthy business owners trying to take even more from the public than already is taken. Almost all taxpayers complain about taxes, their anger is deflected onto the truly needy, that deflection is part of an effort to hide where too many tax dollars go, and now, it appears that taxpayers are figuring out what has been happening. They think to themselves, “Some years ago, I voted for, or didn’t object to, a tax increase to fund a private business or a private business with a very visible public presence, like a professional sports arena. My wages didn’t increase, my unemployed friends continue to be unemployed, city and county services have been reduced, there are more potholes on the roads, and the owners of the businesses siphoning off tax dollars are wealthier than eve. Enough. No more. This time I’m going to vote, and I’m going to push the no button.” Sometimes education is a long, time-consuming process, but hope springs eternal.

There’s a man in Montana who is unhappy that the county treasurer has not cashed the check he wrote in November to pay his property tax bill. After waiting several months for the check to be cashed, Scott Dion, according to this report, retained a lawyer to help sort out the situation. The lawyer notified the treasurer that failure to cash the check violated the First Amendment, and ran afoul of two state laws, one requiring financial institutions to report the deposit of public money, and the other requiring county treasurers to keep a record of tax payments. The lawyer accused the county treasurer of official misconduct and suggested that the treasurer be prosecuted.

According to Dion, he writes something on the memo line of most of his checks. Earlier in 2016, he wrote “bulls—t” on the memo line of a tax payment check. He claims that the county treasurer have never failed to cash his checks in the past, despite whatever he had written.

But perhaps the reason things changed things is what he wrote this time. In the memo line, he wrote, “sexual favors.” Dion’s lawyer thinks that the county treasure was offended and thus decided not to cash the check. My guess is that the county treasurer is playing it safe. For example, according to a FatWallet forum discussion, putting “sexual favors” in the money line is not as unusual as one might expect. Though some bank tellers laugh and deposit the check, in one instance, according to a commenter, a bank teller refused to deposit the check because, he surmised, it was proof of an illegal activity. Perhaps that is why Dion’s check, according to the county treasurer, is in the hands of the county attorney. The county attorney’s only reaction is that there is no current civil or criminal case pending with respect to Dion’s check. But perhaps there will be, in the near future. According to this decade-old news story, Robert Militzer was ordered to appear in court after writing “bulls—t money grab” in the memo line of a check written to pay a $10 parking ticket. He faced thirty days in jail and a $250 contempt of court fine, but I am unable to determine what ended up happening in his case. There is a difference, though, because what Militzer wrote, and what Dion wrote on an earlier check, do not suggest the commission of a crime as does what Dion wrote on the November check

And here many of us thought that the biggest form-of-tax-payment challenge was the use of coins, as I discussed in Does It Make Tax Cents?, It Still Doesn’t Make Tax Cents, and Trying to Make Cents of Two More Coin Payment stories. It remains to be seen what happens with electronic funds transfers. I can hardly wait.

Seventeen months ago, in Taking and Giving Back, I wrote:

It’s a familiar story. A private sector business asks for special tax breaks and taxpayer funding for an enterprise that already is extremely profitable and that will continue to be profitable. The justification is that the business generates economic benefits for the public at large. Some of the most egregious instances of this money grab occur in the professional sports industry. I wrote about this eleven years ago in Tax Revenues and D.C. Baseball, and three years ago in Putting Tax Money Where the Tax Mouth Is, Taking Tax Money Without Giving Back: Another Reality, and Public Financing of Private Sports Enterprises: Good for the Private, Bad for the Public.

Though this happens more often than I write about it, from time to time it helps to remind people that “taking” isn’t confined to those who are the objects of the makers’ scorn.

A few days ago, a news report out of Cincinnati explained that that owners of U.S. Bank Arena need to upgrade their building. This development was sparked, apparently, by the ownership group’s successful bid to host the NCAA men’s basketball tournament. The kicker? The bid requires the city of Cincinnati and the county of Hamilton to provide some of the $350 million needed to do the upgrade. How much is desired by the owners has not been revealed by them, nor have they disclosed how much of their own money they plan to spend. Here’s some advice to the owners: Spend $350 million of your own money, or however much it costs to do the renovations. You can make it back through ticket sales, concession sales, parking fees, and television contracts.

Fortunately for the taxpayers of Cincinnati and of Hamilton County, their elected officials, perhaps keenly aware of public sentiment, have expressed deep reluctance about tossing public dollars into the begging baskets of wealthy arena owners. The fact that the city and country already committed nearly $1 billion to the not-so-poor owners of the city’s professional sports teams has something to do with that reluctance. One official explained that the county would be willing to help facilitate zoning and other regulatory issues, but doesn’t have money to dish out to the arena’s owners. Officials doubt the public would be willing to approve another tax or an increase in existing taxes. The city has a budget deficit, and the county expects a revenue decrease because of changes in state laws that reduce the number of items subject to the county sales tax. The city and the county do not want to increase an already sky-high 17.75 percent hotel tax. The owners of the arena don’t have any major sports tenants lined up, nor is it likely they could find one. They claim, however, that they don’t need one because “major concerts and events” could “bring hundreds of millions in dollars in economic activity to the region.” It’s the same old song, and it’s rather out of tune.

If the owners of U.S. Bank Arena cannot make it work using their own money, they can do what every middle-class would-be entrepreneur does when the economics don’t work. They abandon their plans, or close down the enterprise, and find another way to accomplish their goals. The wealthy think that they are entitled to financial contributions from everyone else because their activities allegedly benefit society. So, too, do the activities of the would-be entrepreneurs. If what any of those entrepreneurs, wealthy or middle-class, is doing provides the claimed societal benefits, the enterprise will flourish and will not need public support.

When a reader sent me an email directing my attention to this commentary I knew immediately that it was a foolish proposition that begged for a response. How did I know? The headline told me, “Let’s Make Tax Day a Month Earlier.”

The authors who came up with this idea relied on several general observations about behavior and on several specific bits of empirical evidence. First, they noted that 25 percent of people filing tax returns did so between April 1 and April 22, with 10 percent of taxpayers filing after the deadline. Second, they asked, “So why are people waiting to file?” They suggested several answers. First, those who delay are not expecting a refund. They questioned this explanation because 32 percent of tax refunds are distributed after April 1. Second, they considered the notion that people who wait until the last minute to file taxes don’t like free money, characterized that idea as absurd, and then noted that “this line of thinking is used by many business leaders and product managers. Using employer contributions to employee retirement plans as an example, they pointed to a change in employee retirement plan enrollment options that increased employee participation, and concluded that people have busy and complicated lives, and thus leave for tomorrow tasks that require more time and effort. Third, they pointed to another experiment involving zero-interest loan applications as support for the proposition that deadlines matter, and when a deadline is imposed, participation rates increase. Fourth, they relied on another study to support the claim that shortening a deadline increases participation. Fifth, they concluded that late filing could be eliminated by moving the deadline for filing individual Forms 1040 from April 15 to March 15, because most taxpayers receive their Forms W-2 and 1099 in January or February.

This commentary was published on a Scientific American blog, so I am going to take this suggestion apart using scientific methods. Specifically, I will examine facts and law.

First, anyone who understand tax law knows the answer to “Why are people waiting for file?” The answer is, “It depends.” It depends on the person and the person’s situation. Yes, there are procrastinators, especially those who file after the deadline. They don’t file late because the deadline is April 15 rather than March 15. They file late because they are psychologically insensitive to time. Many people have had the experience of advancing the time for meetings in an effort to get late-comers to show up on time. Yet the late-comers still manage to be late. Most people, however, who file in April do so because they do not yet have the information required to file the return. Though they do get the information in time to avoid filing for an extension of time in which to file, there simply is no way for them to file by March 15. Why? They are waiting for Schedules K-1 from partnerships, LLCs, and S corporations. They are waiting for information from trusts and estates.

Second, although 32 percent of refunds are distributed after April 1, a good-sized chunk of those refunds are generated from returns filed in March. Refund checks aren’t mailed, and direct deposit refunds are not posted, on the day that a return is filed or even on the day it reaches the IRS. Even with a March 15 deadline, refund checks would continue to arrive as late as May.

Third, changing the deadline to March 15 for those folks who have all the information they need by the end of February does nothing for the people who do not. Under this deadline change, there would be a huge increase in the number of taxpayers filing extension of time to file returns.

Fourth, not everyone received all of their Forms 1099 by the end of February? Why? Because Forms 1099 coming from brokerages and mutual funds, for example, cannot be issued until the brokerage or mutual fund receives the information it needs to generate the information on customers’ Forms 1099.

Fifth, changing the deadline to March 15 for those folks who have all the information they need by the end of February would compress tax return preparation into a two-week period at the beginning of March that would swamp tax return preparers. Deadlines need to reflect the amount of time required to perform a task, the amount of material and information that needs to be collected, and the workload on those facing the deadline. There is a huge difference between a theoretical proposition and practical reality.

Sixth, trying to accelerate the receipt of Forms 1099 and Schedules K-1 by accelerating the dates by which those items must be distributed would require, in turn, acceleration of the processes that lead up to the distribution of those items. For example, full implementation of the “Make Tax Day a Month Earlier” proposal would require partnerships to file their returns before they had time to close their books and do the accounting for the calendar year that just closed. I’m confident brokerages would agree that accelerating the due dates for Forms 1099 would require them to undertake tasks that would not only be burdensome but downright impossible.

Seventh, anyone who has the required information for their tax return and who wants to file early can do so under current law. If people want to wait, so be it. It’s no loss to the rest of us. In fact, it provides the rest of us another month of interest-free use of the money that does not get sent as a refund until April or May. Advancing the deadline will not reduce the number of people who procrastinate because they are oblivious to calendars and clocks. It will, however, require people to invest time and effort in filing extensions of time to file.

Eight, the only reason this “Make Tax Day a Month Earlier” proposal doesn’t win the prize for being the most impractical tax filing deadline change idea is that another one, made years ago, continues to be absolutely mind-boggling. More than thirty years ago, Representative George Gekas proposed requiring taxpayers to file their tax returns during the month in which their birthdays occurred. He explained that he was trying to spread IRS processing work over the year, and defended the birthday concept because it give people an easy way to remember when their tax returns were due. To avoid the absurdity of requiring January babies to file by January 31, he conceded that people born during the first four months of the year would have an April 15 deadline. So much for an easy way to remember when tax returns would be due. The IRS informed Gekas that it has already surveyed taxpayers, tax return preparers, and IRS agents on the question of staggered filing schedules, and the idea had failed miserably. The adverse collateral consequences were another problem, including disruption of training and hiring, and the financial cost of keeping seasonal employees on a full-year basis. Though Gekas claimed to have support for his idea in the House Ways and Means Committee, it went nowhere. And that is where the “Make Tax Day a Month Earlier” proposal will go, unless the federal tax system is radically changed in ways that eliminate taxes.

Six years ago, in Why Teaching Isn’t Just a Matter of What One Knows or Understands, and in a follow-up post four years later, Still Puzzled Four Years After Conviction to File Income Tax Returns, I wrote about the disappointing saga of a member of the faculty of the Hamline University School of Law who failed to file Minnesota income tax returns, and who eventually was convicted. Now comes a report that a member of the economics faculty at the University of Minnesota has been charged with failure to pay Minnesota state income taxes and with failure to file state income tax returns. My first thought was that withholding ought to cover the taxes due on her $160,000 teaching salary and that perhaps she had other income for which she should have been making estimated tax payments. Of course, that doesn’t excuse the alleged failure to file returns. It turns out that somehow, the university withheld very little from her pay, and my guess is that she claimed multiple exemptions to push down the withholding. Though she has not filed returns and paid her full tax bill since 2003, the statute of limitations prevents the state from reaching back beyond 2010.

The state sent more than 40 letters to the taxpayer at her university office, but she did not respond. When Department of Revenue officers searched her home, office, and automobile, they found the letters. Apparently, when being interviewed five months ago, she admitted that she knew she needed to pay taxes and file returns, but that she had not received any letters. She claimed that she thought her withholding was sufficient to meet her tax liabilities. She also admitted that when she lived in Philadelphia she had been subjected to a tax audit.

According to another report, the taxpayer claimed excess withholding allowances, and received unreported taxable distributions from a pension plan. A person who is employed full-time sometimes can collect on a pension plan from a previous employment that permits retirement at an age younger than the typical 65. Whether that was the case in this instance is unclear. Department of Revenue investigators also discovered that she had purchased a condominium but eventually the mortgagee foreclosed on it. Credit card receipts showed expenditures in the thousands on “travel, restaurants, grocery stores, liquor, and wineries.”

Investigators also found 60 letters from the IRS and the Philadelphia Department of Revenue. Whether those organizations have proceeded or are proceeding to bring criminal charges is not known at this time.

The taxpayer’s university profile suggests the taxpayer is intelligent, educated, and accomplished. It appears that the failure to file tax returns and to pay taxes is not a question of comprehension but a consequence of some deeper issue. There surely is more to this story, and it is possible that additional information will be forthcoming.

Sometimes it’s not enough to produce some evidence to support a taxpayer’s claim for an exclusion, deduction, or credit. Sometimes it’s not enough to produce what the taxpayer has or knows. Sometimes it is necessary to find and produce evidence of what others have or know. This challenge is illustrated by what happened to the taxpayer in Jenkins v. Comr., T.C. Summ. Op. 2017-22.

The taxpayer claimed a dependency exemption deduction, a child tax credit, an earned income credit, and head of household filing status based on his position that a minor child was his qualifying child or his qualifying relative. The taxpayer and the child’s mother had never married. The child’s mother had full physical custody. The taxpayer had visitation rights one day per week, every other weekend, approximately seven holidays, two weeks in each of July and August, and some additional overnight weekend visits.

The taxpayer provided evidence that the child spent 150 days with him during the taxable year. The court concluded that, absent any other evidence, the child must have spent the other 215 days with his mother. Thus, the child did not have the same principal place of abode as did the taxpayer for more than one-half of the taxable year. Thus, the child was not the taxpayer’s qualifying child.

The taxpayer also provided evidence that he paid at least $2,999 for the child’s support during the year. However, there was no evidence of how much the child’s mother paid for the child’s support. Thus, the taxpayer failed to show that he provided more than one-half of the child’s support during the year. Thus, the child was not the taxpayer’s qualifying relative.

As a result, the taxpayer’s claim for claimed a dependency exemption deduction, a child tax credit, an earned income credit, and head of household filing status based on his position that a minor child was his qualifying child or his qualifying relative was rejected. What could the taxpayer have done?

It appears that there is nothing the taxpayer could have produced as evidence to show that the child was his qualifying child. With the child spending only 150 days with the taxpayer, there is no way that the 183 day minimum could be proven. On the other hand, though it is unlikely that the child’s mother spent less than $2,999 on the child, if that was in fact the case, proving it would be essential to the taxpayer’s position that the child was his qualifying relative. The practical problem is simple to describe. How does the taxpayer obtain information from the child’s mother to show what the child’s mother spent? Depending on how, or whether, the taxpayer and the child’s mother get along, the taxpayer is pretty much at the mercy of the child’s mother. That puts the taxpayer in a difficult position. A remedy, seemingly fair, would be to require the mother to produce that evidence in support of her claims with respect to the child. That, however, is yet another example of how the tax law becomes more complicated.

At the beginning of the month, in And Now It’s California Facing the Road Funding Tax Issues, I described the California proposal to raise revenue to fix its crumbling highway infrastructure. The proposal was enacted shortly thereafter. The legislation raises gasoline taxes for the first time in more than twenty years, increases car registration fees, and imposes a fee on emission-free vehicles. I pointed out that the plan was meeting with resistance, particularly because in the past, transportation revenues have been diverted to other uses, and that the proposal deals with this concern by including an amendment to the state Constitution to prevent this sort of fund diversion.

Now comes news that the host of a conservative talk radio show has decided to undertake a recall campaign against the state senator who is sponsoring the Constitutional amendment to use transportation-based taxes only for transportation and the proposal to raise necessary revenues. The talk show host asked, “We have $100 billion for high speed rail but need $50 billion for roads?” He then answered his own question, “How about we cancel high speed rail and put savings into our roads?” Well, Mr. Talk Show Host, without high speed rail, vehicle traffic will increase even more, causing even more wear and tear on highways, and thus causing even more of an increase in the funds needed to protect the lives and property of California residents and visitors to the state.

A motorist who spends $100 several times a week on fuel for his truck offered this insight: “I hope they take it down. Do something. There's plenty other places to tax other than gas.” This motorist, however, did not offer any ideas. I suppose he thinks that people who buy milk should be taxed to pay for the damage his driving does to the highways of California? Or perhaps the tax should be imposed on wheelchairs and walkers? The anti-tax crowd that is nurtured and instigated by the anti-tax talk show radio hosts doesn’t want to tax anything. That takes us back to the point I made several days ago in If Users Don’t Pay, Who Should?, after reading that two-thirds of Americans don’t think that road users should pay for road maintenance and repairs. I asked, “Then who should pay? Leprechauns? Unicorns? Fairy godmothers? Mommy and daddy? Santa Claus?” And I answered, “To me, it’s simple. You use the road, you pay. You pay an amount that reflects the wear and tear that you impose on the transportation infrastructure. Those who use the road and don’t pay a fair share are takers, plain and simple.”

Last week, CNN reprinted a report from Motley Fool with the attention grabbing headline, “4 things the IRS doesn't want you to know." The introduction to the story explained:

It's the IRS's job to collect taxes for the federal government, so it's not surprising that most people are less than fond of the agency.
The IRS, in turn, does its best to keep certain facts under wraps -- either because it would make it easier for the agency if people don't know these details, or because taxpayers can use this information to get some of their money back .

The commentary then listed and described four supposed secrets, including for example, “You probably won’t be audited.” That’s not news to anyone who’s been paying attention.

It was the third item that caught my eye. Under the tag line “Qualified charitable distributions in lieu of RMDs,” the report explained, “Once you hit age 70½, the IRS requires you to withdraw a certain minimum amount from your tax-deferred retirement accounts every year. It doesn't want you to be able to hang on to that money forever; after a certain point, it wants to be able to start collecting taxes on the money in these accounts.” That’s not correct, it’s inaccurate, it’s imprecise, it’s misleading, and it contributes to the antipathy Americans hold for the IRS. Do you know who imposed the “begin distributions by age 70.5” rule? Here’s a hint. The answer is the same as the answer to the question, Do you know who “doesn’t want you to be able to hang on to that money forever?” Here’s another hint. The answer to those two questions is the same as the answer to the question, Do you know who “wants to be able to start collecting taxes on the money in these accounts?” The answer is not a three-letter acronym or a three-word phrase. It’s one word. Congress.

Yes, it is Congress that enacts the tax laws. It is Congress that determines what is and is not deductible. It is Congress that establishes tax rates. It is Congress that requires taxpayers to file tax returns. It is Congress that establishes credits. And it is Congress that does such a wonderful job of fooling Americans into thinking that the Internal Revenue Service is responsible for these things.

The inability to identify those responsible for a law or regulation that a person does not like guarantees that the person’s attempt to change things will be misdirected. Asking the IRS to let the beginning of retirement plan distributions wait until age 75 is like asking a police officer to eliminate the stop sign at the end of the neighborhood street. The police officer didn’t put the sign there, nor enact the ordinance establishing a stop sign at the intersection. Misdirected requests, misdirected complaints, and misdirected anger are useless. The solution is education, learning who is responsible for what, who it is that is making someone do something. I wonder how many millions of readers went away from that article thinking, or reinforcing already formed thoughts, that the IRS is responsible for the “begin distributions by age 70.5” rule. I wonder how many member of Congress are chuckling, and congratulating each other on once again duping America.

As readers of this blog know, I am a strong supporter of mileage-based road fees. I have written about the mileage-based road fee many times, beginning with Tax Meets Technology on the Road, and continuing through 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?, 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 And Now It’s California Facing the Road Funding Tax Issues. I support the mileage-based road fee because I think that, where possible, users of services should pay for those services, and those who, for good reason, are unable to pay for essential services should receive assistance in receiving those services.

A reader directed my attention to a study that was released about six months ago. In a press release describing the study, Indiana University explained that, according to a survey of 2,000 Americans, mileage user fees were opposed by a four-to-one ratio. Support would increase if GPS tracking was not part of the measurement system. At least 23 states are studying the mileage-based road fee, but it remains to be seen how many states enact such a system.

The problem, though, isn’t so much a switch from fuel taxes to a mileage-based road fee. The problem is deeper and symptomatic of one of the deep problems afflicting this nation. According to the survey, ”two-thirds of Americans do not believe roads should be financed under the user-pays principle, whether that’s through a fuel tax or mileage fee.” Are they kidding? Then who should pay? Leprechauns? Unicorns? Fairy godmothers? Mommy and daddy? Santa Claus?

The sense of entitlement to getting something for nothing is a serious problem. The deeper problem is that many of those who complain the most loudly and the most frequently about “takers” and “freeloaders” are themselves immersed in their own sort of taking and entitlement. To me, it’s simple. You use the road, you pay. You pay an amount that reflects the wear and tear that you impose on the transportation infrastructure. Those who use the road and don’t pay a fair share are takers, plain and simple.

Last month, in So What Would YOU Do to Avoid Taxes?, I shared and commented on a new Survey from Wallet Hub, which revealed what people would be willing to do to avoid paying taxes in the future. The choice with the most votes, though coming in only at 20 percent, was getting an “IRS” tattoo. You would not find me selecting that option, nor the option of not talking for six months.

These surveys are fun, and so it’s not surprising that a GOBankingRates survey has polled people with the same question. The choices, though, were different. Almost one-third of the respondents would be willing to perform five karaoke songs for their company, an action that the survey’s headline writers tagged as an “embarrassing stunt.” First, considering that at least one-third of people sing well enough to avoid being embarrassed when singing in public, it very well could be that those selecting this option know that they can do at least a creditable job of crooning for their co-workers. Second, even if someone isn’t all that good of a singer, but especially if they are, singing is surely a very inexpensive price to pay for being relieved of tax liability.

The second most popular option was giving up WiFi for a year. Senior citizens were the most willing to give up WiFi, perhaps because for some, it’s easy to give up something one doesn’t use. If giving up WiFi does not include giving up one’s cable connection to the internet, this again becomes a rather low price to pay for escaping tax liability.

Only 5 percent would surrender half of their retirement savings. Certainly, those with very little tucked away would be giving up not much to avoid taxes. According to the survey, people aged 35-44 years were more than three times more likely to select this option that those aged 25-34. That is a bit surprising, because it seems that the older group would have more retirement savings and thus would be paying a relatively higher price to escape taxes.

It was surprising to learn that more members of Generation X would be willing to have their internet browsing history made public, as a price to pay for avoiding taxes, than would senior citizens. That certainly cuts against stereotypes.

Though these survey questions, and the responses, are interesting and even amusing, they are theoretical. The choices are not an equivalent trade-off for government revenue. I wonder what would happen if people were given a chance to reduce or eliminate their tax liabilities in exchange for doing work on public projects, such as filling potholes, cleaning parks, and painting government buildings. Perhaps the next survey will ask questions of that sort.