Joel Slemrod and Michael Keen, authors of Rebellion, Rascals, and Revenue: Tax Follies and Wisdom Through the Ages, share interesting tax facts and lessons learned from history.
Check out our related episode "From Henry VIII to James Bond: Weird Tax Facts Throughout History."
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This episode is sponsored by Avalara. For more information, visit avalara.com/taxnotes.
This episode is sponsored by University of California, Irvine Law School’s Graduate Tax Program. For more information, visit law.uci.edu/gradtax.
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Credits
Host: David D. Stewart
Executive Producers: Jasper B. Smith, Janelle Julien
Showrunner: Paige Jones
Audio Engineer: Jordan Parrish
Guest Relations: Christa Goad
Joel Slemrod and Michael Keen, authors of Rebellion, Rascals, and Revenue: Tax Follies and Wisdom Through the Ages, share interesting tax facts and lessons learned from history.
Check out our related episode "From Henry VIII to James Bond: Weird Tax Facts Throughout History."
**
This episode is sponsored by Avalara. For more information, visit avalara.com/taxnotes.
This episode is sponsored by University of California, Irvine Law School’s Graduate Tax Program. For more information, visit law.uci.edu/gradtax.
***
Credits
Host: David D. Stewart
Executive Producers: Jasper B. Smith, Janelle Julien
Showrunner: Paige Jones
Audio Engineer: Jordan Parrish
Guest Relations: Christa Goad
Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: more tax facts. We're taking a break from our more serious topics to explore the fun side of tax and some of the more unusual stories from history, and perhaps some lessons that can be learned from them. To help me out, I'm joined by Tax Notes chief correspondent Stephanie Johnston. Stephanie, welcome back.
Stephanie Soong Johnston:Thanks so much. Good to be here. Let's rock and roll.
David Stewart:And we've got two guests to join in on the fun: University of Michigan economics professor Joel Slemrod and Michael Keen, deputy director of the Fiscal Affairs Department at the IMF. They're the authors of the upcoming book"Rebellion, Rascals, and Revenue: Tax Follies and Wisdom Through the Ages." Joel, Mick, welcome to the podcast.
Joel Slemrod:Thanks for having us.
Michael Keen:Good to be here. Thanks.
David Stewart:All right. Why don't we start off by going around and talking about some of the more interesting tax issues that we've come across in our research. Mick, why don't you start us off?
Michael Keen:OK. I have one from Argentina around 1900, which still makes me giggle childishly. So Argentina around then had a bachelor tax, a tax on bachelors, which wasn't kind of uncommon at the time. But there was some lovable romantic worried about what do we do about men who make proposals but are turned down. Well, clearly what we need to do is give them a tax exemption. So they should be able, if their marriage offer is refused, to get the rejected woman to sign a tax exemption certificate for them. So we have pictures of men all around Argentina saying,"Well, if you won't marry me, at least will you give me a tax break?" And of course, as all of us would expect, one of the consequences was there emerged a kind of small professional class of women who, for a small sum of money, would in fact guarantee to reject your offer of marriage. And there's even a novel about this, but that's a kind of a timeless classic for me.
David Stewart:I can just imagine if this was in existence today, there'd probably be some app where you could match up the people that will reject you with the bachelors looking for the exemption.
Stephanie Soong Johnston:That's like a reality TV show right there.
Joel Slemrod:They were called professional lady rejectors.
David Stewart:I do appreciate a formalized name for something like this. Joel, what do you have for us?
Joel Slemrod:Mine is not technically about a tax. It's about a fee. And the story is also late 19th century in Curaçao. They built a bridge to connect the two parts of the city and they were going to charge a toll or a fee to cross the bridge. But they had in mind making the fee structure progressive as we understand it today. It should be higher for rich people than for poor people. So how did they do this in 1888? Well, the scheme was that people who were wearing shoes, presumably better off people, had to pay the fee, but people who cross barefoot were exempt from the fee. But of course sometimes the best laid plans can backfire. And so what happened was that often poor people were so proud they didn't want to be identified as poor so they would don or borrow shoes to cross the bridge, but have to pay the fee. And of course a lot of the rich people figured out that they would just take off their shoes and save the money. So the lesson there is sometimes the design intended to introduce progressivity into the fee structure can backfire.
David Stewart:All right. I can't imagine anything like that happening today. Right? Stephanie?
Stephanie Soong Johnston:Well, so it was so hard to choose because there are so many fun ones out there and a lot of them you covered in your book. So I didn't want to duplicate efforts there. But there was one random tax fact that I came across during my reporting. In 2014, ABBA admitted that they had dressed so crazily as a band in the seventies because under Swedish tax law, at the time, they could deduct the costs of their costumes as long as they were outrageous enough that they couldn't be possibly worn out in public. So that was pretty fun. I loved that little tax efficiency maximization strategy for them. It's just kind of showed me that no matter what kind of policies are in the tax code, someone's going to try to maximize those deductions and manage their tax affairs that way. So it's a pretty creative way of doing it. And now we've got this pop culture reference that we can all know and love. Related to that, this is really recently in December of 2020, there was a New York Times interview with Paul McCartney. And in it he was talking about this famous photo where he and John Lennon are talking about something during an album cover shoot for Abbey Road. It turns out they were talking about how John Lennon wasn't filing his tax returns and how Paul McCartney was trying to convince him that he must do this otherwise he'll get busted. So that was also a really fun little tax fact, probably a little more recent than what you both have talked about so far. So that's all I have today.
Joel Slemrod:We knew about the first one. I think we had to cut that because our first draft apparently was too long. So we had to cut 30 percent of really great stories, but I'd never heard about the second one.
Stephanie Soong Johnston:Yeah, it's pretty cute.
David Stewart:All right. So I'll go with my fact which combines two of my interests and that's tax and whiskey. And it comes down to Irish whiskey tastes fundamentally different from Scottish whiskey in large part because of a tax. And this goes way back. This is 1785 and the Irish are actually the first recorded whiskey makers in the world and the Scots followed shortly thereafter. And at the time they were basically using malted barley. So it's the same fundamental ingredient as beer, but the tax man looked for his cut of this industry and they'd already taxed the output, they'd already taxed the stills, so all that was left was to tax the inputs. So they instituted the malt tax. And in response to that, Irish distillers switched to a different spirit style where they use both malted and unmalted barley in the mash. And over time, this became the style that was preferred. It's called single pot still. And even after the malt tax disappeared, they continued producing this single pot still whiskey. And it is the fundamental flavor note that we think of when we think of Irish whiskey today. However, the tax man was not done yet with changing Irish whiskey because there's a tax adjacent fact in here as well. And that is that all of the alcohol industry was changed by an Irish tax authority. For this, we look to a gentleman by the name of Aeneas Coffey. From 1800 to about 1824, he actually was chasing these illicit distillers around Ireland trying to collect taxes. In Ireland, the equivalent of U.S. Moonshine is poitín, so he was chasing these people around in 1810. He actually got stabbed twice as he was attempting to collect revenue from them. But then 1824 rolls around. He's risen through the ranks of the tax authority. He's actually updated excise taxation in Ireland and he retires to go off and basically join them— now not to be an illicit distiller, but he decided to become an inventor and distiller. And what he invented was a modern version of the still. It's a variation on the column still that was being developed at the time. But he developed one that was so much better than what already existed to the point where today we still call it either alternatively the column still or the coffee still. It was adopted largely by Scotland very quickly. Eventually the Irish picked it up. And so now if you go to your local store or your local bar and you look for a middle shelf Irish whiskey, what you're going to find is it's a single pot still whiskey that's been blended with whiskey that was made from a coffee still. So we have taxes to thank for this lovely beverage that comes to us from Ireland.
Michael Keen:Oh. We have our second edition already.
David Stewart:Happy to get you started.
Stephanie Soong Johnston:It strikes me how much alcohol and tax really go hand in hand, especially in your book, you mention a lot the Whiskey Rebellion, which— Pennsylvania, that's where I'm based right now, so it's very interesting,
David Stewart:I have a bottle on my shelf that's named for a gentleman from the Whiskey Rebellion who punched a revenue officer.
Stephanie Soong Johnston:Yes. Wigle.
Michael Keen:Oh punching wasn't too bad for some tax inspectors, so they got off pretty lightly if they're just punched I think. But there were some gruesome fates of tax inspectors that we even hesitated to tell in the book they were so gruesome. So punching is not too bad.
David Stewart:All right, well let's turn to your book now:"Rebellion, Rascals, and Revenue: Tax Follies and Wisdom Through the Ages." First, can you tell us a bit about your book and how you came to write it?
Joel Slemrod:Let me start with the second question[of] how we came to write it. Mick and I have known each other for decades, and we learned over that time that we both had a fascination with obscure tax facts[and] fascinating tax events of the past. In my office at work I have hundreds of books and whenever I came upon an interesting tax fact, I would put a sticky note on it. And at some point it might've been Mick's partner Géraldine who suggested,"You guys both love this. Why don't you write a book together?" And we looked at each other and smiled. And we said,"That's not a bad idea." Now that was six or seven years ago. Once we agreed, I know how I started. I just went down my bookshelves, pulled out every book that had a sticky note, and I just made a note of why I had done that, what was interesting about it, add them all in a file. Then the next step was trying to organize them. And now six years later here we are. We have a book.
Michael Keen:That's right. So yes, without yellow stickies this would never have happened, I think. As Joel says we picked up a bunch of stories. I think we also saw that actually there's a whole series of lessons in these stories. And maybe one way we can make things more accessible to people, more interesting, is to use some of these examples to teach some of the basic principles of taxation. Things about which I think of in part of our sense is that our profession— we're both economists— hasn't done a terrific job in explaining some basic ideas about taxation[and] how to think about taxation. So we wanted to try and make taxation interesting and accessible, and try and convey some of these basic ideas. We don't try and push any of our own particular pet tax schemes. That's not what we're trying to do. But we're trying to tell some of these stories, some of them a little bit more involved than some of the ones we've told, that illustrate some basic things we think people should have in their minds when they read stuff about tax in the newspapers and so on. So that's why we try and weave these stories together to make tax interesting, entertaining, but also to kind of teach people to think a bit more carefully about tax than maybe we often do. Which is our fault. I think our profession's fault.
Joel Slemrod:Well, I know everybody on this podcast doesn't think this way, but apparently some people think tax is dry. Apparently. I've been told. And so one of the objectives of our book is to make it interesting and fascinating. And along the way, as people are fascinated, they can learn, as Mick said, some lessons about what separates tax wisdom from tax folly.
Stephanie Soong Johnston:Yeah. What I liked about the book is that you kind of organize it by theme rather than timeline. It's kind of like this rollicking adventure through time. You're taking certain stories and using them to illustrate,"This is how governments make people pay taxes. This is how people avoid those taxes. And this is how policy is made," and various themes. So can you just like talk more about how you came to organize the book using these themes? And how did you decide which facts to put in and how to fact check that? Because it's a hard thing to fact check.
Michael Keen:Maybe I can start on that one. I'm glad you noticed the[structure] because it was actually quite hard work making it work that way. I think what makes it work is one of the other themes, which is[that the] rather basic themes of taxation really haven't changed that much over the millennia. I mean, governments are still trying to kind of extract revenue, but without destroying the tax base. They're still trying to think,"Well, how can I make this tax at least seem fair enough that I'm not going to have a revolt or rebellion on my hands? What is the kind of collateral damage I might cause? How can I use technology to observe and to verify various things?" So I think that's sort of why we decided, why we hope it works, to structure by themes because we can bring out these continuous threads really in the tax[past]. And really if you look underneath the book it has the structure of really a public finance course. Don't tell anyone. It follows the kind of much the same order. I don't know if Joel would agree that we would probably write a textbook, but it's kind of — that's the skeleton in a way. But it hangs together with these kind of timeless themes. But Joel may disagree. I don't know.
Joel Slemrod:Oh I totally agree. And I really hope that people who have to teach taxation or get to teach taxation, I should say, will use this, our book, as a supplement to a textbook because now we've got 70 images here that try to bring taxation to life. We've got some pretty amazing stories. So I think it will keep students' attention. And at the end of the day, they will have learned the lessons that a textbook tries to convey in a much more accessible and fun way.
Stephanie Soong Johnston:So did you also intend it to be targeted at a broader audience?
Joel Slemrod:Absolutely. I mean, that's our goal that tax nerds will certainly want to have it. People who teach taxation should get it. It will help make their classes more fun. But we really hope that it reaches a broader audience. It's people who should care about tax and people who don't otherwise, but really should since you can see it today, it's starting to creep back into the front pages now every day. It's an important issue and the key issues are not always easy to digest. And we think and hope that people who are interested in public policy will come to the book and both laugh and learn.
Stephanie Soong Johnston:What surprised both of you most about your research?
Joel Slemrod:OK. Well, I can answer two questions at once. You asked a few minutes ago how did we fact check it? So I'll say with a lot of work because neither Mick nor I are historians. We talk about scores, maybe hundreds, of episodes from tax history. It was a hard job to make sure we got everything right. Let me say that in a couple of cases after our research, we were pretty convinced that the story wasn't true, but it was so great that we put it in the book anyway, but then told the reader,"OK. This is such a great story, but we now think it's probably not true."
David Stewart:That's"The Man Who Shot Liberty Valance." Are people familiar with this movie?
Joel Slemrod:No. I don't know that one.
David Stewart:The movie ends with the line,"When the legend becomes fact, print the legend."
Joel Slemrod:OK. So my favorite example of this is the dog without a tail, which we have a picture of. So the story is that a tax law in England, a tax on dogs, had an exemption for dogs without tails because dogs without tails were thought not to be useful for hunting, which was the reason for the tax to keep the peasants' dogs from interfering with the royals' hunting. And so what happened, of course, is that some peasants had their dogs' tails cut off in order to save the tax liability. That became sort of the style until this day. Some dogs are known for being curtailed, to have no tails. I mean, you can read this story on the internet. Just Google it. But we're now pretty sure that it isn't true.
Michael Keen:It's a great question. What surprised me? I think the story that I was most kind of pleasantly surprised by, I think, was we discovered this kind of version of blockchain in about 300 BC China. And we saw this in the Beijing tax museum, two beautiful pieces of metal, I suppose. And again, there's a picture in the book. Beautifully inlaid with bronze and silver, and beautiful characters and so on. And basically these were to implement a tax exemption, that when the boat was going down the river, checked in customs, these two pieces of beautiful materials had to fit together. And what's interesting is that these very much look like bamboo stalks and it's clear this was an older habit that they used to use basically break some bamboo. And then the only way you could get through customs was if you had the matching bit of bamboo. Which I thought was just wow. That was 2,000 years ago. I thought that was pretty good.
David Stewart:So would you say, you know, in your research you've found that there are any areas where tax administrations are forgetting the lessons of history and repeating the same mistakes?
Joel Slemrod:Well, that is a great question. In fact, I think there are good examples of how modern proposals are going to have to learn the lessons of history. Let me talk about the wealth tax because it's in the news now. It's been proposed for the U.S. and in the book we talk about earlier episodes of how rich people try to avoid taxes. My favorite example was these two British brothers Edmund and William Vestey, who in the early 20th century had a global business of meat production and distribution, and they wanted to minimize their taxes. So the brothers moved a lot of their business to Argentina. One of them, I think, actually became an Argentine citizen and they were so successful at minimizing their taxes when in 1993 the law changed so the queen was subject to tax, one of the descendants of the original brothers said,"Well, that makes me the last one." Meaning,"Now I'm the only one who doesn't have to pay tax." So what does this have to do with the wealth tax? It means that when you try to tax high-income people, there will be among the high-income people efforts to avoid the tax and evade the tax. And in designing a tax like this, you have to pay very close attention to the enforcement. Don't just put in the tax and then a couple of years later say,"You know, maybe we should have these rules to minimize the avoidance and the evasion." Think about that right from the beginning. Now I think the proponents of the wealth tax in the U.S. have learned that lesson because in their proposal they think a lot about the enforcement measures needed for a wealth tax to work.
Michael Keen:One issue we talk about in the book is this whole issue of intrusiveness and privacy. That when you look at the history of taxes, the fears of intrusiveness have been a constant. I think a nice example of that is the window tax, which in the U.K. and elsewhere, we had a tax on windows. Which now people think,"Well, that's very quaint and slightly silly." But it was actually replacing a tax on fireplaces, both being as kind of indicators of wellbeing. But the key difference was to count someone's fireplaces you have to go into their house. To count their windows you can stand outside. And that was a kind of a major development.
Joel Slemrod:I can pick up on the window tax. It's a fascinating episode. And another reason it's fascinating is that it illustrates vividly and visually how taxes can affect behavior in a way that can be costly to an economy. So the window tax: for a while there was no tax due on houses with nine or less windows. But once you had 10 windows there started to be a non-trivial tax due. People have gone back into the records of the window tax from centuries ago and discovered that there were a heck of a lot more houses with nine windows compared to 10 windows. Why? Well everybody learned soon enough if you had nine, you owed nothing. If you had 10, you did owe something substantial. And so you can still see in England today stately houses where it was clear there used to be another window or two, and they were bricked up and they stayed bricked up. OK. That couldn't have been a huge cost to the English economy, but it represents what we tax economists call excess burden. In addition to the tax due, there were these changes in behavior that wouldn't have happened if it weren't for the tax. Nowadays, we worry more about less labor supply than there otherwise would be, or less investment than there otherwise would be. But that's hard to make vivid. But we, in the book, we have pictures of houses where there clearly used to be windows that were bricked up, which just couldn't have been the optimal design of a house if it weren't for the tax.
Stephanie Soong Johnston:The window tax is a pretty interesting[one]. And I would never have thought about the privacy issues related to enforcement of the fireplace tax. That's really interesting. I think you've mentioned the River Cam[that] when you take one of those punting boats up on the River Cam you can see instances of this where there's like one window would be enough to eliminate like five rooms because they just positioned it so they could save money on the tax. Right? So the window tax always comes up, especially among U.K.#TaxTwitter.
Michael Keen:And I think it makes the point that our ancestors were intrinsically just as smart as we are designing taxes and avoiding them. They may not be weird to us now. And as we say, many of our taxes, we're sure will look weird to people in 50 years time. They'll think," Why on earth did they do that?"
Stephanie Soong Johnston:Not to get morbid or anything, but you all mentioned some gruesome tax facts that you included in the book. Given the fact that death and taxes kind of go hand in hand, could you maybe elaborate on some of these kind of questionable tax facts that you were sort of on the fence about?
Joel Slemrod:The gruesome stories are often about tax enforcement[like] when governments or rulers were not happy about tax evasion. They could overplay their hand a little bit. So in Transylvania, one of the rulers became known as Vlad the Impaler because there was a town which wasn't paying what he thought they should be paying. And he went in and killed a lot of the noncompliers and impaled them, hence the name. So yes, there are gruesome stories about gruesome tax enforcement for sure.
Michael Keen:The violence is sometimes on the tax collectors themselves as well— as your guy was punched during in the Whiskey Rebellion. There are some stories of basically excise officers dealing with smuggling in 18th century Britain who really would've been happy to be punched out. Let's put it that way. But we tell that story in the book sadly. But I think we partly do that more seriously in tribute to— there are tax officials around the world today who are doing really tough jobs. And in many countries they are risking physical violence, and they're doing it often for not much money. So I think in our quiet way, we also want to pay a bit of tribute to the people who are doing a pretty thankless job, but one that is important for all of us.
Joel Slemrod:There was even a statue raised for a tax administrator— that being Robert Hart— who worked on the tax administration in China. And in honor of his contributions to the Chinese civil service, a statue of him was erected in Shanghai. It's not there anymore. It's the only statue of a tax collector we're aware of.
Michael Keen:It's well deserved. He even has novels written about him as well. He had an interesting non-tax-related life as well. He is quite a character.
Stephanie Soong Johnston:So you were talking about the perils of tax collection. I was thinking about the tax collector who bred the Doberman to protect him while he was on his rounds. So that was one of my other interesting tax facts. Can you guys tell me more about the punishment in Mughal India involving cats? Could you maybe elaborate on that punishment?
Michael Keen:We don't have any great detail except[that] we are like you. We were just struck by a description in one of William Dalrymple's books where it just says the punishment was that you had to wear leather trousers and they would put cats down the trousers. And the rest is left to our imagination. Apparently.
David Stewart:I'm just imagining the journey that goes on where you're being told what your punishment is going to be."Well, you have to wear leather trousers.""All right. Fine.""And we're putting cats in them.""Oh, now I see what you're going for."
Joel Slemrod:I was surprised by in the end how many stories about dogs and cats made it into the book. Quite a few. And there's even a story about lice where under the Inca administration, I think it was for districts that had no explicit liability just to get them used to the idea of paying tribute to the ruler, they had to remit live lice to the ruler.
Stephanie Soong Johnston:That is really, really gross.
Michael Keen:On a happier note, another thing that recurs a lot in the book is heads. Hats and wigs and heads are all over the place. I guess again because of this thing that they're easily observed. Right? Like hat taxes[and] wig taxes in Europe, particularly England. You could tell if someone was wearing a hat[so] that was a good thing to tax. Beards as well. All these head things. And of course a head tax is the same as a poll tax. So heads and cats and dogs appear a lot in the book. It has to be said.
Stephanie Soong Johnston:What do you hope that people take away from the book? I know you sort of touched on this earlier, but what are some lessons that you hope that readers will take away from this?
Joel Slemrod:We do our best in the book to, at the end in the last chapter, to try to summarize the lessons going forward. So we have 11 lessons in the last chapter. Some of them are going to be obvious to people who are in the business. For example, tax sovereignty is a thing of the past. That the idea that a country can formulate its tax policy without thinking about what tax systems other countries have and the incentives to move investment abroad or move yourself abroad because of the tax system can't be ignored. The idea that tax enforcement comes down to making people aware that if they don't pay what they owe there will be penalties. I think that's an important lesson. Some social scientists say that people comply with their tax liability because of a sense of honor and duty. And no doubt there are people who do that. I think the evidence is clear that what really matters is that if your fear that if you don't comply you'll be punished. You won't be impaled— not anymore. But you might be punished.
Michael Keen:I guess one theme we haven't talked much about is in the lessons Joel described is kind of the irrelevance of what a tax is called. The politicians and others like to give the names to taxes that kind of imply who's really going to wind up paying these taxes. When of course in practice it's often far from clear who's really going to be ending up bearing the real economic burden of the tax. So again this goes back a millennia. We talk about George in England again. There was a tax on female maidservants. And of course the thought was that this is going to be borne by the rich employers of female maidservants. Of course a lot of anecdotal evidence[was that] it wasn't. Wages of female maidservants went down. So it's this recurring theme that we really have to think through, not just judge a tax by its name, but try and think through who is really going to be bearing the burden of this tax. And we may not always know the answer, like the corporate income tax. We can still disagree what the answer is, but I think one of the things that's important that we'd like to accomplish with the book is to get people into the habit of really at least arguing, to try to think through who is really going to bear this tax. What are you assuming about who's going to bear this tax? Just because you call a tax a Robin Hood tax, well that sounds great. But OK let's think about what that really means. And I think that's probably one of the areas where I think we could all do a better job, I think, explaining to people."Well actually just because the tax is called something[like] it's called a tax on luxury items. Well, it doesn't necessarily mean it's going to be the rich people buy those luxury items and bear the burden." So that's just one of the other lessons I think.
David Stewart:So here in Washington we're currently talking about raising revenue to pay for infrastructure. So are there any interesting ideas of tax that you've come across that you'd either want to see or just would kind of want to see how it worked out if we were to try from history?
Joel Slemrod:Well, one of the success stories of the last 50 years— no I should say the success story of the last 50 years— is the value-added tax. We're the last, basically the last country of the world that's not adopted it. I think about a third of all the revenue raised all over the world is now from the value-added tax. It's an example, I think, of the success of tax wisdom. It's not a perfect 10, but it's one that has a lot of interesting and successful features. So if the U.S. were to embark on raising revenue in a serious way I think that should be part of the story.
David Stewart:Any bad ideas from history that you'd be curious to see them try out again?
Michael Keen:I'm always interested in the taxation of ships and shipping, which continues to be an issue around the world. So the worst I think was probably[when] the British decided to tax ships on the basis of how long they were and how wide they were, which sounds fine. But the consequence is that you then get very deep ships because you pay less tax. And that was a bad tax because— I don't know anything about boating or anything— but apparently that makes ships very unseaworthy. So the great irony for me at least was when the British were ruling the world in the 19th century with our Navy, we were the laughing stock of the world apparently in terms of the quality of our merchant shipping. But I guess that's not going to come back. But when I think about bad taxes, that always sticks out in my mind.
Joel Slemrod:When you asked that question I think not so much about bad taxes, but taxes that were enacted for bad reasons. And my two that I point to are both U.S. taxes. The first is soon after margarine was invented, which was the late 19th century when margarine started to come be used in the U.S., the dairy industry was not excited about this. And first they got state legislatures to enact regulations. For example, margarine had to be pink rather than yellow. But it didn't take long for them to enact taxes on margarine. That's an example of a tax motivated by the interests of a particular industry as opposed to motivated by what's good tax policy. Another example is in the 1930s in the U.S. when chain stores started to become big, the mom-and-pop businesses could see this was a threat. And yes soon enough there were regulations, and soon after that there were taxes on chain stores. A story which resonates today where there is certainly political pressure to reign in Amazon and Walmart in part because of the political power of small business.
David Stewart:All right. Joel, Mick, thank you for being here. This has been great.
Joel Slemrod:Thanks for having us. It's been a lot of fun.
Michael Keen:Yeah. Thanks both of you. Thanks a lot.
David Stewart:And thank you as well, Stephanie.
Stephanie Soong Johnston:My pleasure.
David Stewart:And now coming attractions. Each week, we highlight new and interesting commentary in our magazines. Joining me now from her home is Acquisitions and Engagement Editor in Chief Janelle Julien. Janelle, what will you have for us?
Janelle Julien:Thanks, Dave. In Tax Notes Federal, Kate Kraus examines how typical partnership indemnity provisions may result in double taxation for some partners under the Bipartisan Budget Act of 2015. Margaret Ryznar points out that the home office deduction is beneficial to both employees and employers and argues that it should remain part of the IRC. In Tax Notes State, its advisory board members discuss budget pressures created by COVID-19 shortfalls and how states will use tax policy to respond. Annette Nellen reviews issues and recommendations from the most recent report of the IRS national taxpayer advocate submitted to Congress. In Tax Notes International, practitioners with McDermott Will& Emery examine the general framework for the FDII deduction. Guy Bracuti examines the interaction of U.S. rules on dual consolidated losses with OECD recommendations. And finally, on the Opinions page, Roxanne Bland examines efforts to repeal the sales and use tax on menstrual hygiene products. Robert Goulder examines the Eighth Circuit’s Coffey decision, involving a taxpayer’s status as a bona fide resident of the U.S. Virgin Islands.
David Stewart:You can read all that and a lot more in the pages of Tax Notes Federal, State, and International. That's it for this week. You can follow me online@TaxStew, that's S-T-E-W. And be sure to follow@TaxNotes for all things tax. If you have any comments, questions, or suggestions for a future episode, you can email us at podcast@taxanalysts.org. And as always, if you like what we're doing here, please leave a rating or review wherever you download this podcast. We'll be back next week with another episode of Tax Notes Talk.