The "Jock Tax"

Until yesterday, I'd never heard of the "Jock Tax".  Leave it to California to lead the charge in screwing it all up for everyone...

From the Tax Foundation's "Jock Taxes Continue Spreading to Non-Jock Professions":

“The jock tax began with California trying to get revenge on Michael Jordan and the Chicago Bulls for beating the Lakers in 1991,” said David Hoffman, adjunct scholar with the Tax Foundation and co-author of the new report. “Illinois fought back with a retaliatory tax the next year. Since then, many other states have joined in.”

It gets even better...

The report shows that states are expanding the jock tax concept to include other types of nonresident income from non-sports-related professions. For example, New Jersey has begun taxing visiting attorneys, and Cincinnati has levied a tax on touring skateboarders. Several jurisdictions have begun taxing traveling entertainers.

The report says some states are getting so greedy that they have a "stay time".  In New York, if you spend 14 days or less on the job in their state, you're just visiting.  Stick around for the 15th day and you are required to file a tax return.

I'm not a lawyer, tax attorney, nor a constitutional scholar but it seems to me that the Commerce Clause in the Constitution should apply here.  This is crazy.  Especially for people who live in a state with no personal income tax.  The people who pay state income tax can deduct the tax payments made to other states (except Sammy Sosa, see MSN Money's "Could You Be Hit By The 'Jock Tax' ").  People that have no state income tax get no offset. 

Doesn't take a rocket scientist to figure out that if by going to New York or California or Illinois to work on a project or something for my job that it will cost me money, then I'll take a pass.  So say you live in L.A. and you've got truck loads of money and your wife or child needs some specialized operation.  You go after the best doc in the world for it, only he or she says, "sorry, but I don't operate in California because they will make me file and pay taxes and it is too much of a financial and administrative burden".  Say you live in New York and someone is suing your business and if you lose it will bankrupt you.  They've hired the best lawyer in the state of New York for this type of case, so you find the best lawyer in the country for this type of case.  Problem is they're in Seattle and they flat refuse to come to New York because of the tax burden.

Those are just the examples of the wealthy and powerful.  What about the poor schmucks that say drive an over the road truck that covers a 4 or 5  state region.  They pick up and drop off in all 4 or 5 states.  They're making 50 or 60 grand a year.  Now all of a sudden they're paying taxes in all 5 states and they can't afford to keep driving.

Now that you have to pay truck drivers more because of all the taxes they are forced to pay, the cost of moving "stuff" to store shelves just went up and you guessed it, the price of food and everything else goes up.

This has got to be the worst tax policy I have ever seen or heard of.  This is a perfect example of bad government decision making and all the unintended consequences that come with it. 

Contrary to the name of the blog, I'm not a Federalist.  If anything, I'm a small government conservative Republican with a Libertarian bent.  However, I think this is a time when our Federal Government needs to step in and stomp on the states and shut this down!

Comments

[ninme]

Isn't that taxation without representation? (Think I've heard that phrase before... hrmmm...)

But seriously, that's why you get your GST back when you leave Canada..

[Mrs. Hamilton's Pamphlets]

Hey nin that's what I said when he was reading it to me last night. I say all these guys need to start registering to vote in all these states and see what they do with that.