Tuesday, March 20, 2012

Most Amazing and Plain Weird Taxes

Most Amazing and Plain Weird Taxes

Weird and Crazy Taxes (And Tax Breaks) From the U.S. and Around The World

What is a Tax

A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the government. A payment exacted by legislative authority. A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."

Everyone knows that taxes are one of life’s only certainties. But while most of us are well acquainted with income and sales taxes, few of us are aware that some countries tax prostitution. The same goes for tax breaks. No one bats an eye about writing off some office supplies, but did you know that Germany (until recently) allowed businesses to deduct the cost of bribery? The United States and the rest of the world tax – and exempt from taxation – strange activities and behavior that virtually no one would have expected, or has any rational explanation for.

Illegal Drugs Tax

Perhaps the most puzzling tax in the entire world is the state of Tennessee’s tax on the possession of illegal drugs. According to CNN, “you have 48 hours to report to the Department of Revenue and pay your tax” on any illegal substance you purchase in Tennessee, after which you will get “stamps to affix to your illegal substance” which “serve as evidence you paid the tax on the illegal product.” Naturally, one might assume that such a tax would never be paid for fear of simultaneously being arrested for breaking drug possession laws. But in an even more perplexing twist, Tennessee does not require any identification whatsoever to get the stamps, and “it’s illegal for revenue employees to rat you out.” Nonetheless, voluntary compliance with this tax is quite rare. CNN reports that North Carolina, (which has a similar law) has seen “only 79 folks have voluntarily come forward since 1990″, with another 72,000 being taxed after they were discovered and arrested.

Prostitution Tax

Given that prostitution is explicitly banned by the laws of many countries, it might come as a surprise that some nations not only allow it, but tax it. In fact, the UK’s Daily Mail describes a particularly bizarre case of a teenage girl who auctioned off her virginity for £8,800 – apparently the going rate for a “weekend of sex with an Italian businessman.” But while 18 year old Romanian native Alina Percea undoubtedly saw the transaction as a harmless way to score some extra money, German tax officials determined that their 19% VAT tax could “land her with just over £3,000″ to pay in taxes before all is said and done.

Withcraft tax

In the Netherlands, citizens are apparently permitted to deduct the costs of training in the fine art of witchcraft. In their article on the 5 Most Bizarre Tax Deductions From Around the World, refers to Margarita Rongen as a “tax verified witch”, citing the Daily Mail’s report on how Rongen had successfully deducting thousands of dollars in schooling. In Rongen’s case, “schooling” was a rather loose term, equating to courses “that are held 13 weekends a year closest to a full moon when outdoor rituals are practiced and potions boiled.” Among the many skills and aptitudes honed during witchcraft schooling are “healing with herbs and stones, making potions, divination and fortune telling with crystal balls and hieroglyphs.” Needless to say, Dutch citizens and members of Parliament were none too amused. However, as Rongen points out, this seldom utilized deduction is not new – it is simply getting more attention, and now has the support of a judge.

Weird Baby Names Tax

Until very recently, the Swedish Tax Authority had the power to decide whether the names parents chose for their children were acceptable – and forbid them from using names deemed to be “weird.” As Wikipedia states, the Swedish Tax Authority’s official take on the issue was that:

“First names shall not be approved if they can cause offense or can be supposed to cause discomfort for the one using it, or names which for some obvious reason are not suitable as a first name.”

This law has produced several humorous protests over the years, including a parent who named their baby boy “Brfxxccxxmnpcccclllmmnprxvclmnckssqlbb11116″ in 1991 in direct opposition to Swedish policies in 1991. More recently, in 2007, Michael and Karolina Tomato fought aggressively for the right to name their daughter “Metallica.” The Swedish government has evidently loosened up as of late however, with reporting that parents are pushing the envelope with names like Elvis, Google and Lego. Swedish tax official Lars Tegenfeldt was quoted as saying that “changing times” have induced the Swedish Tax Authority to be less stringent in enforcing the odd name ban. While it isn’t a tax in the purest sense of the word, Sweden is likely the only nation in the world whose tax officials have the final say over what people’s names are. Strange indeed!

Pornography Tax

Italy didn’t make many friends in the adult entertainment world when Italian Finance Minister Giulio Tremonti successfully pushed a “25% tax on all hardcore pornography” through Parliament in 2005, according to the BBC. Despite pornography industry objections that their products are already taxed at the VAT level and that it is therefore illegal to single them out for a second tax, the Italian government ultimately prevailed, due to Rome’s desperation to “find new revenue because it has to trim its budget deficit to meet EU rules.” Tremonti, for his part, defended it as an “ethical” tax. A similar tax exists in France, and “will apply to all hardcore pornography, including films, magazines and merchandise sold in sex shops.” Whether the tax impeded the health and growth of Italy’s billion euro a year pornography industry was a concern most citizens did not seem to pay much attention to.

Bribery Tax

Germany’s second contribution to today’s article is even more bizarre than its first. A seldom-discussed and rarely used deduction in Germany’s tax law that permitted private businesses to write off the costs of bribery on their corporate income tax returns. According to BusinessWeek, the reason the deduction was not used more often is that it “requires names to be named” – both the business making the bribe and the business or individual accepting it. That being said, it’s still quite bizarre to hear about a western economic powerhouse like Germany not only permitting bribery within its borders, but exempting this universally condemned practice from income taxation. Quite understandably, German citizens without any ties to the business world were severely critical of this law, which was only eliminated in recent years.

Cow Flatulence Tax

Taxes on cow flatulence have been proposed in several European countries in recent years, including Ireland and Denmark. The Irish variant, which was ultimately defeated before it became law, called for a tax of $18 per animal, while Danish proposals were even more stringent, including levies “as high as $110 per cow” according to Fox News. The outcries for these taxes came on the heels of a U.N. Food and Agriculture Organization study claiming that 18% of the greenhouse gases believed to cause global warming can be traced back to the unsavory “byproducts” of livestock. The Danish Tax Commission took it even further, estimating that “a cow will emit four tons of methane a year in burps and flatulence” while an average car emits just 2.7 tons of carbon dioxide during the same period. Cow flatulence taxes may sadly soon become the norm, rather than a comical anomaly.

Playing Cards Tax

For reasons that may never be fully explained or understood, the state of Alabama singles out decks of playing cards for a unique tax of its own, TurboTax reports. CNN elaborates with more details, including the amount of the tax (10 cents), the criteria for determining which decks get taxed (those containing “no more than 54 cards”) and the taxes assessed on retailers themselves – “an annual license tax of $3 and a fee of $1.” Little is known about the exact origins of this tax or its original purpose, but one suspects it is a remnant from a much earlier era that was simply never phased out in modern times.

Force Cigarette Smoking Tax

Virtually every industrialized nation taxes cigarettes, as they do most inelastic (few substitutes available) goods. However, we’re fairly confident in saying that China (the Hubei province, specifically) is the only nation, now or ever, to increase the revenue it earns from cigarette taxes by literally forcing their citizens to buy and smoke tobacco. The UK’s Telegraph reported in May 2009 that “local government officials in China have been ordered to smoke nearly a quarter of a million packs of cigarettes” as part of an unorthodox push to stimulate the economy during the financial crisis. Lest you wonder if the Telegraph was simply reprinting an April Fool’s joke from The Onion, it was confirmed that “even local schools have been issued with a smoking quota for teachers”, and one village was even “ordered to purchase 400 cartons of cigarettes a year for its officials”, as reported by a local government webpage. Furthermore, special fines were established for officials who “failed to meet their targets” or were “caught smoking rival brands manufactured in neighboring provinces.”

Tax Exempt Sex Toys

While Italy has moved to heavily tax sex toys (among other pornographic products), MSNBC reported in 2006 that the Australian government had begun allowing “tax deductions for adult toys and lingerie.” While these deductions are restricted to prostitutes, strippers and dancers, the range of items they can deduct is quite broad, encompassing “condoms, lubricants, gels, oils [and a] myriad of other items.” Interestingly, MSNBC elaborates that these same individuals cannot deduct the cost of fitness classes to stay in shape, though they can deduct dance classes specifically. A complete list of deductible items for “the sex industry” is made available and routinely updated by the Australian Taxation Office, for those interested in keeping up with the latest write-offs for professionals in this field.

Jock Tax

What began as bitter blood has turned into a lucrative source of state funding, as taxing “jocks,” performers, and other entertainers, can generate serious revenue.

California first imposed the Jock Tax back in 1991, after the Chicago Bulls beat the LA Lakers in the finals. The next time “His Airness” played in Los Angeles, the money he made on those games was officially subjected to the California State Income Tax. Since that time, half of the states in the union have adopted a Jock Tax, taking a cut from high-paid heroes, and putting the added resources to work for local communities.

Window Tax

Those who live in glass houses couldn’t afford the taxes.

Although it sounds ludicrous, the Window Tax of 1696 was actually a relatively ingenious way of imposing an income tax on the rich without ever calling it that.

Affecting England, Scotland, and Great Britain, in the 18th and 19th centuries, this tax on windows was actually meant as a tax on wealth, as people with more income generally live in nicer houses, and nice houses generally have more than two windows. While this tax directly led to the bricking up of many windows, it also eventually led to a fair and less arbitrary income tax that honed-in on wealthier citizens.

Blueberry Tax

Blue Gold

According to Maine, the production of wild blueberries is one of the most important agricultural industries in their state, making it necessary to protect it with a tax.

Without a tax, the precious blueberries of Maine could be over harvested. The state of Maine gets a penny and a half per pound, keeping the blueberry business in check, so that plants are able to thrive. This separate cent is applied to every pound of blueberries sold, on top of regular taxes.

Candy Tax

You have no choice. The hard stuff just calls to you.

Coming from Chicago, the candy tax has as much to do with semantics as it does chemistry. Who can blame them for taxing something irresistible?

For example, candies prepared with flour (like chocolates and ice cream) count as “food,” and are therefore taxed normally. Candy prepared without flour (such as hard candies and suckers) are labeled “candy,” and are therefore taxed an additional 5.25% merchandise rate. A similar rule holds true for soft drinks. The difference in levels of soy, milk, or fruit juice in a beverage can make a difference of 5.25% at the cash register.


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