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The sometimes lighter side of taxes
Posted By Barry Ritholtz On April 15, 2004 @ 4:59 pm In Politics | Comments Disabled
Tax him, he looks good
In the old days before you had to tell the government how much you were making, the tax assessors just figured if you looked like you were living well you might as well pay a tax on it. To help pay off the debts of the War of 1812, for instance, the Commonwealth of Virginia decreed that if you owned a mirror or some curtains, or maybe a chest of drawers, you’d have to pay a tax of a few pennies on it (not a sales tax, this was after you owned it).
The idea of good living changed a bit as time went on. At the start of the Spanish-American War that newfangled invention, the telephone, was taxed as a luxury.
An intriguing footnote: When Muslim invaders swept through what is now Europe, they may have been engaging in a holy war. Yet once they won, they tried to get the Christian infidels to convert by offering them tax breaks.
The lady fills out her tax form
As near as we can tell, the oldest peaceable tax protest ever recorded still stands the test of time as one of the few worth watching. That was when Lady Godiva rode through town nude a thousand years ago just to get her money- grubbing husband the Earl to slash taxes on the peasants so they would have the time to learn to appreciate art like Lady Godiva did.
It was all part of a bet. But she did it; so did he. History books verify that Coventry was the only town then that levied a tax on its horses but not on its people.
Legend has it that to save both her and his lordship embarrassment (and possibly to get a nice tax break too) the townspeople averted their eyes when her ladyship rode. Later legend has it that only one person dared peek and that was a young guy dubbed Peeping Tom, but he didn’t have much to lose – probably just an “unmarried head of household.”
Mountain man: ‘Wild Bill’ Tell
William Tell is known for making a clean shot that saved his son’s life, but down deep his troubles were about taxes too. The Alpine hunter had offended the German king’s tax collector, who ordered that Tell show his skill by shooting an apple off his son’s head, or else.
Tell did, lived to escape and led a guerrilla band that beat back the invading army and its eager tax collectors. Switzerland was free. It is not known if young Walter Tell ever again ate fruit.
Taxman, sin no more
Some of the earliest references to the tax collector are scathing, as in the biblical linking of taxman and sinner. But that seems to be a local phenomenon: In ancient Israel, the occupying Romans hired men who knew the neighborhoods to do the collecting and the other Israelites naturally regarded them as bad guys.
In other perhaps more lucrative parts of the sprawling empire, tax collector was a much-sought-after position, and the license was bid on by a new breed of travelling “merchant knights” from Rome.
In parts of what is now Egypt, the second-biggest pyramids housed the remains of the second-biggest man in the land, the tax collector, who after all raised the money for the pharaoh’s lifestyle and his death-style too.
Catching the rich guy as he slides into third
When a New York ballplayer lands on the road he has to remember to come up with two extra payments: $10 or so for the bellhop and $10,000 or so for the state he’s playing in. More than 20 states now have a so-called “Jock Tax,” which forces prominent athletes to pay an income tax of perhaps 20 percent just for the privilege of playing there.
As ESPN noted, at one point last season the Mets’ Tom Glavine wasn’t even scheduled to play on a four-game roadtrip to San Juan but he still owed $42,000 to the Puerto Rican government.
“The Jock Tax began with California trying to get back at Michael Jordan for beating the Lakers in 1991,” says Tax Foundation economist David Hoffman, who obviously keeps an eye on the sports pages too. “And Illinois fought back with a retaliatory tax the next year.”
When his deduction went up in smoke – so did he
A furniture store owner couldn’t sell his store but he had $500,000 insurance on it. He thought nothing about hiring an arsonist but he would never never dream of cheating the IRS. So he hired an arsonist for $10,000.
On his tax return the businessman declared the $500,000 as income and made all the usual business deductions including an unusual $10,000 “consulting fee.”
Herb Wakeford, a certified public accountant, recalls that an audit two years later not only disallowed the deductions but also hit the entrepreneur with $6,500 in added tax penalties and landed both him and his consultant in jail. Hopefully in a “No Smoking” section.
Once a year, a taxing time 
WARREN BERRY; Research provided by Laura Mann and Tracy Brown
Newsday, April 14, 2004
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