President Obama Should be Subject to Income Tax in States and Foreign Countries He Visits

Taxation
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I’m no tax expert. In fact my lowest grade in law school was in … income tax. Big surprise. But I pay enough in taxes to qualify me to opine, I think.

President Obama earns a $400k a year salary. This makes no sense, as I’ve noted in Taxing Astronauts and the President (see also Why is it okay to pay an intern $0? or, liberal hypocrisy on the minimum wage), because most people would pay lots of money to be President; if anything, they should receive no salary, and be taxed on the imputed income they receive for being permitted to be President. But there you have it.

Now Obama pays federal and presumably D.C. income tax on his salary, because he resides in D.C. (Instead of taxing them on the stolen tax dollars paid them, why not just pay them the difference, tax free? Nah, make ’em file the tax returns like us plebes.)

But when Obama travels outside D.C.—to another state, or country—he is “always on the job” and usually performing official duties that he is being paid for. Apparently this is technically subject to local income tax in the state or country one performs activities in that earn money. This is why it’s okay to visit the US on a tourist visa, for example, but you cannot earn money while here. And so on.

Consider how pro athletes and famous performing artists are treated when they travel around making money in various states and countries. As noted in an L.A. Times article a couple years ago, “The taxing life of a pro athlete” (tagline: It’s one of life’s certainties: Athletes have to pay for income earned on the road):

For eight of his first nine major league seasons, Angels pitcher Darren Oliver worked in Texas, where the stars at night are big and bright and, more important, there’s no state income tax.

Yet, each April, he pays a small army of accountants to file more than a hundred pages of returns — and sometimes checks — to as many as a dozen states and one province in Canada, covering taxes on income he earned on the road.

In the tax world, it’s no secret that athletes are treated differently from other highly paid workers — investment bankers and corporate lawyers, for example — who also work in multiple states. The jock tax, critics say, is poorly targeted, arbitrarily enforced and unrealistically burdensome — and also completely understandable given the current economic climate.

“No, it’s probably not fair,” says Ralph Espinosa, a Miami-based accountant who has done tax work for several NFL and major league players. “But they make more money than most of us. Their information is easily accessible online. Most people know their salaries [and] they can go in and see their schedules.”

Athletes are taxed based on “duty days” they spend in each state. In baseball, there are approximately 181 “duty days,” meaning a player earning $1.81 million would make $10,000 each duty day. Therefore, if that player’s team had three games in California, he would be responsible for taxes on $30,000 of income.

At that point, all the tax collectors have left is a math problem to figure out that Ichiro Suzuki, the highest-paid baseball player in Washington, a tax-free state, will have to pay more than $218,000 in California taxes for the 25 games the Mariners will play there this summer.

The salaries and schedules for lawyers, bankers, entertainers and other professionals who might be subject to nonresident taxes aren’t as accessible. But that hasn’t stopped some states from trying to reel in CEOs and other well-paid executives by auditing corporations for their travel records, tax professionals say.

Touring entertainers such as singers or comedians often have taxes withheld by either the promoter or the venue. But collecting from film crews can be trickier since shooting schedules aren’t publicized and are frequently changed and actors aren’t on the set every day.

(See also The Tax Significance of Place of Residence for Professional Athletes.) So it appears that anyone who travels out of their home state as part of their income-earning job, technically is supposed to file multiple tax returns pro-rated by jurisdiction, but most people don’t do this because it’s hard for the other states to know. Sort of the same reason states have trouble enforcing the “use taxes” that residents of the state are supposed to pay on sales-tax free purchases of goods from Amazon. But for pro athletes, ” Their information is easily accessible online. Most people know their salaries [and] they can go in and see their schedules.” For normal people, however, like film crews, “shooting schedules aren’t publicized and are frequently changed”. So states focus on the big fry.

However: President Obama has a somewhat high salary, it’s publicly known, and it’s known publicly when he’s in another state or country. So when Obama meets with the President of France, in Paris, France should go after him for the French income tax due on the portion of his income attributable to his time in France. Or Canada, or California, or so on. I demand rectification of this outrage!

Or, better yet, he should be brought up on tax evasion charges.

And the same applies for other prominent politicians, like governors, members of Congress, Secretary of State, and so on.

And while we’re at it, politicians ought to have their Amazon accounts audited to ensure they are voluntarily paying use taxes in their state for all items bought sans sales tax.

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Kinsella on Anarchast Discussing IP, Anarcho-libertarianism, and Legislation vs. Private Law

(Austrian) Economics, Anti-Statism, IP Law, Legal System, Libertarian Theory, Podcasts, Police Statism
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I was a guest on Jeff Berwick’s Anarchast (ep. 51, 36 min), released today. We discussed anarchy and how such a society might be reached; the basis and origin of law and property rights and its relationship to libertarian principles, and implications for legislation versus law and the legitimacy of intellectual property; also, utilitarianism, legal positivism, scientism, and logical positivism. Description from the Anarchist site below; MP3 download. For more background on IP, see the C4SIF Resources page; on legislation vs. private law, see The (State’s) Corruption of (Private) Law.

 

Anarchast Ep. 51 with Stephan Kinsella

Jeff Berwick in Acapulco, Mexico, talks with Stephan Kinsella in Houston, Texas

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Kinsella’s Anarchy in Turkish in Time for Turkey Day

Anti-Statism, Libertarian Theory
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My 2004 LewRockwell.com article, “What It Means To Be an Anarcho-Capitalist,” has been trasnalted into Turkish, “Anarko-Kapitalist olmak ne anlama gelir?” (19 Nov. 2012), by Jay Baykal. This is the fifth translation of this article; in all, my publications now appear in fourteen languages, including English.

Update: it is now also available on Mises Turkey’s site.

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Top State Evils: A Scorecard of Libertarian Progress

(Austrian) Economics, Anti-Statism, IP Law, Police Statism, War
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The most evil and harmful state laws, institutions, and policies are, I believe:

  • war;
  • the Fed/central banking/fiat money;
  • government schools;
  • taxation;
  • the drug war;
  • intellectual property (patent and copyright).1
You could also mention the regulatory state and the entitlement state, but the above makes a pretty good listing of the top things we libertarians would get rid of if we could.

How are we doing on these issues? I spoke with some radical libertarian friends—it’s fun musing as to which one you would abolish first, if you could—and here is the basic take:

  • war: not great, but they are getting harder for modern debt-laden welfare-states to afford;
  • the Fed/central banking/fiat money: not great, but bitcoin could pose a threat;
  • government schools: not great, but at least, in the US, homeschooling and private schools are legal;
  • taxation: not great, and getting worse, but there seems to be a limit to the level of taxes the state can get away with imposing on the economy;
  • the drug war: still horrible, but significant inroads have been made in the last election, with marijuana being legalized on a state-law basis by Washington and Colorado; and
  • intellectual property: getting more and more out of hand, but being seen as more and more ridiculous and unjust. Copyright is getting easier to evade with various technologies like encryption and bit torrent; and patents are being seen more and more as ridiculous and protectionist.

Overall, the biggest cause for hope is probably the recent progress made in the insane, evil war on drugs.

 


  1. See Where does IP Rank Among the Worst State Laws? 

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Is English Common Law Libertarian?

(Austrian) Economics, History, Libertarian Theory
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In a fascinating blogpost, Michael McConkey asks Is English Common Law Libertarian? [bad link; archived version, and repixeled below] Many libertarians tend to view the common law as being quasi- or proto-libertarian. McConkey argues, relying largely on Harold Berman’s classic Law and Revolution, II: The Impact of the Protestant Reformations on the Western Legal Tradition (v. 2), that,

in [Sir Edward] Coke’s time  [1552-1634] and far before, England was characterized by what modern libertarians would celebrate as legal polycentricism. There was a wide range of legal and judicial systems at work. In addition to the common law, there was ecclesiastical and canon, manorial, merchant, Roman, martial and Chancery law: not an exhaustive list! These all had their own laws and courts. Furthermore, this diversity of judicial options had exactly the benefits which pro-polycentricist libertarians would anticipate. Anyone who felt they were being abused in one court system could appeal to another for redress. Berman tells of cases where individuals were imprisoned by one court system, but managed to secure release by the authority of another court system.

McConkey argues that this kind of polycentrism is quasi-libertarian, but that Coke and other common-law proponents largely destroyed it by pushing the common law and its central place to the fore:

[polycentrism] is just this kind of mitigation of legal and judicial monopoly that libertarians (certainly voluntarists and libertarian anarchists) aspire to with their opposition to the state. Yet, make no mistake, Coke and his fellow common lawyers were not conspirators in this regard. On the contrary, their rooting of English common law in a mythical antiquity was precisely intended to give it the historical authority not only to triumph over monarchial sovereignty, but over all the other competing courts in England. Coke and crew’s battle with James I was not a battle against legal monopoly, but for it – just the promotion of a different claimant to the throne of legal monopoly.

Further, this was achieved precisely by means of the distinctly common law premise of finding historical sources upon which the common law could claim superior jurisdiction. Legal systems based upon positive or natural law, by definition, did not have the fundamental recourse to historical revisionism (temporal imperialism) that was at the core of the common law tradition. It was uniquely situated to win at this game. And, of course, this project of institutional imperialism has proven remarkably successful: today awareness of a once polycentric English legal order has all but vanished from popular knowledge.

I see two lessons here, one for advocates of common law as libertarian and a second for promoters of Hayekian spontaneous order as a kind of meta-reason that leads inexorably to freedom. From the perspective of libertarian values, not only does the common law tradition have blood on its hands (the blood of legal polycentricism), but it has logically built into its conceptual DNA a will to power. The temporal imperialism of its historical revisionism turns a blind eye to the subjectivity inherent in any interpretation of the past. Coke himself was prone to find “new” precedents when he changed his mind on a legal matter. History provides far too rich a buffet from which the jurist may pick and choose the precedents of preconceptual convenience — including common laws’ own legal supremacy.

Secondly, as valuable has been Hayek’s observation on the nature of the market  as a spontaneous order, emergent rather than planned, the tendency to apply this same lesson to other social domains overlooks the ubiquity of power. Whether or not it is possible in today’s world to have markets free of coercion and struggles for power, it seems unlikely in other domains of society. Certainly no existing order’s historical roots can ever be claimed to be free of such machinations. Common law, both its practice and its ascendance, is without doubt the result of spontaneous order. But neither the seeds nor the fruit of that result can be considered consistent with or beneficial to libertarian aspirations for freedom. The virtues of spontaneous orders for freedom, whether or not they’re always superior to planned ones, cannot be credibly assumed in any given instance.

None of this is to deny that there is some kind of potential for a market based customary law system to deal with the inevitable gray areas and space of subjective dispute that will arise even amid the most conscientious application of natural law. Its foundation though, unlike common law, should not be in subjective interpretation of history, but the aggregate application of subjective preferences, free from coercion. That may be a tall order, but it’s a picnic compared to getting consensus on the meanings of the past. And it is, indeed, the real lesson of value from Hayek on the virtues of spontaneous order.

See McConkey’s interesting post for elaboration. For related matters, see my posts/articles:

ARCHIVED VERSION

Is English Common Law Libertarian?

Law and Revolution, II: The Impact of the Protestant Reformations on the Western Legal Tradition (v. 2)Though far from universally held, there is an opinion on the part of many libertarians that the English common law is a bastion of libertarian virtue. This view is most closely associated with the thought of F.A. Hayek, but hardly exclusively so. There is an irony in this view, though. For part of the reason Hayek was supportive of the common law tradition was his conviction in the merits of social order as spontaneous and emergent.

From this perspective, common law, with the implications of evolving precedents, based upon changing social norms, seemed superior as a basis for libertarian law than the centralized assumptions of legal positivism – in which legal legitimacy was determined by the effectual imposition of law by legal central planners. As valid as this way of thinking may appear, the irony is that our current perception of common law is itself a product of spontaneous order. What Hayekian fidelity to spontaneous order too often overlooks is that it is often the compromise from power struggles, neither side of which is libertarian.

A valuable corrective to this error in perception is provided by the work of the late Harold Berman. Though, perhaps, better known as one of the leading scholars of Russian/Soviet law, in a parallel career, Berman distinguished himself as a trenchant and insightful student of Western legal history. In his scholarship, he tells an intriguing story of how our current perception of the English common law came to be. It is in fact the product of the early 17th century power struggle between King James I and the jurists of the King’s Bench, particularly Edward Coke.

James I is historically notorious for his forceful and uncompromising defense of The King's Two Bodies monarchial absolute sovereignty. And he rooted this defense in the implicit King’s mystical body doctrine, a theological doctrine smuggled into medieval philosophy and legal theory long before the rise of the ultimately star-crossed Stuart dynasty. (Those who’d like to understand these developments better should check out my talk to the Libertarian Dinner Club of Vancouver.) Part of this mystical body doctrine was the idea that all kings of England were in fact but one king of England. They appeared in different natural bodies, but the king was eternal and transcended any individual body. In this way, James’ defense of his sovereignty was very much rooted in the necessity of historical precedent.

Coke and the common lawyers, as they came to be called, did get into a good deal of trouble with James. Edward Coke himself spent seven months in the Tower of London. Their situation would have been far worse, though, had they the audacity to launch a frontal assault upon James’ theoretical self-legitimization. Instead, rather brilliantly, Coke avoided such consequences by ignoring James’ theoretical legitimization and arguing, in agreement with James, that indeed historical precedent was the centre piece of English law. However, he then proceeded to effectively undermine James’ claim to sovereignty by “demonstrating” that it was the history of judicial rulings, by judges, that provided the substance of English laws (not, as it turns out, monarchs).

Hence, by accepting James’ premises, ignoring his intentions, and applying the former in disregard of the latter, Coke effectively undermined James’ conclusions and thereby his legitimate claim to sovereignty. Without doubt, this was one of the great intellectual sleight of hands of all time. And, insofar as it contributed to the downfall of absolutist monarchy – providing theoretical fuel to both the English and Glorious Revolutions later in the century – libertarians might be tempted to celebrate it. However, that would be jumping ahead too quickly. For, as Berman makes clear, Coke and the common lawyers were not merely crucibles of liberty. On the contrary, this promotion of common law over monarchical sovereignty was only one part of a larger project of legal imperialism within England.

This is true in two ways. First, the idea that the common law is a great, venerable tradition going back to antiquity is part of the ideological construction of Coke and his crew. This idea of the common law was in fact invented in the 17th century, not in Anglo-Saxon England and certainly not in pre-Roman antiquity as Coke would have it. It was a revisionist history of English law. So there was a kind of temporal imperialism involved. However, more concerning is that the purpose of this temporal imperialism was to buttress an institutional imperialism. The triumph of this revisionist history of Coke and the common lawyers has left many of us with a distorted picture of English legal history.

The Structure of Liberty: Justice and the Rule of LawThe fact is, in Coke’s time and far before, England was characterized by what modern libertarians would celebrate as legal polycentricism. There was a wide range of legal and judicial systems at work. In addition to the common law, there was ecclesiastical and canon, manorial, merchant, Roman, martial and Chancery law: not an exhaustive list! These all had their own laws and courts. Furthermore, this diversity of judicial options had exactly the benefits which pro-polycentricist libertarians would anticipate. Anyone who felt they were being abused in one court system could appeal to another for redress. Berman tells of cases where individuals were imprisoned by one court system, but managed to secure release by the authority of another court system.

Surely it is just this kind of mitigation of legal and judicial monopoly that libertarians (certainly voluntarists and libertarian anarchists) aspire to with their opposition to the state. Yet, make no mistake, Coke and his fellow common lawyers were not conspirators in this regard. On the contrary, their rooting of English common law in a mythical antiquity was precisely intended to give it the historical authority not only to triumph over monarchial sovereignty, but over all the other competing courts in England. Coke and crew’s battle with James I was not a battle against legal monopoly, but for it – just the promotion of a different claimant to the throne of legal monopoly.

Further, this was achieved precisely by means of the distinctly common law premise of finding historical sources upon which the common law could claim superior jurisdiction. Legal systems based upon positive or natural law, by definition, did not have the fundamental recourse to historical revisionism (temporal imperialism) that was at the core of the common law tradition. It was uniquely situated to win at this game. And, of course, this project of institutional imperialism has proven remarkably successful: today awareness of a once polycentric English legal order has all but vanished from popular knowledge.

I see two lessons here, one for advocates of common law as libertarian and a second for promoters of Hayekian spontaneous order as a kind of meta-reason that leads inexorably to freedom. From the perspective of libertarian values, not only does the common law tradition have blood on its hands (the blood of legal polycentricism), but it has logically built into its conceptual DNA a will to power. The temporal imperialism of its historical revisionism turns a blind eye to the subjectivity inherent in any interpretation of the past. Coke himself was prone to find “new” precedents when he changed his mind on a legal matter. History provides far too rich a buffet from which the jurist may pick and choose the precedents of preconceptual convenience — including common laws’ own legal supremacy.

Secondly, as valuable has been Hayek’s observation on the nature of the market  Law, Legislation and Liberty, Volume 1: Rules and Orderas a spontaneous order, emergent rather than planned, the tendency to apply this same lesson to other social domains overlooks the ubiquity of power. Whether or not it is possible in today’s world to have markets free of coercion and struggles for power, it seems unlikely in other domains of society. Certainly no existing order’s historical roots can ever be claimed to be free of such machinations. Common law, both its practice and its ascendance, is without doubt the result of spontaneous order. But neither the seeds nor the fruit of that result can be considered consistent with or beneficial to libertarian aspirations for freedom. The virtues of spontaneous orders for freedom, whether or not they’re always superior to planned ones, cannot be credibly assumed in any given instance.

None of this is to deny that there is some kind of potential for a market based customary law system to deal with the inevitable gray areas and space of subjective dispute that will arise even amid the most conscientious application of natural law. Its foundation though, unlike common law, should not be in subjective interpretation of history, but the aggregate application of subjective preferences, free from coercion. That may be a tall order, but it’s a picnic compared to getting consensus on the meanings of the past. And it is, indeed, the real lesson of value from Hayek on the virtues of spontaneous order.

 

Bibliography

Berman, H. J. (1994). The Origins of Historical Jurisprudence. The Yale Law Journal , 103 (7), 1651-1738.

Hayek, F. (1973). Law, Legislation and LIberty: Rules and Order (Vol. 1). Chicago: Univeristy of Chicago Press.

Hayek, F. (1945). The Use of Knowledge in Society. American Economic Review , XXXV (4), 519-30.

Kantorowicz, E. H. (1981). The King’s Two Bodies: A Study in Medieval Political Theology. Princeton: Princeton University Press.

 

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