Can we get that shaving deduction?
From beard taxes to yachts, history teaches that you never can tell how people will respond when you find a new way to tax them. Except that some of them will find some way to avoid paying it.
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SCOTT JAGOW: Well, I’ve put it off as long as I could. Gotta do the taxes this week, and I will be writing a check. But at least the government doesn’t make me pay my taxes and shave. Sean Cole tells us a little story about that.
SEAN COLE: A while ago, I went on this guided tour of historic Boston pubs. The guide, a guy named Kim Carrell, was dressed as the 18th Century ship’s captain Silas Talbot.
But unlike the real Talbot, this guy had a beard. So we’re talking about beards and 18th Century America and all of a sudden he says . . .
KIM CARRELL: There was actually a beard tax.
COLE: Come on.
CARRELL: No there was.
COLE: There was a beard tax?
CARRELL: There was a beard tax.
Because it wasn’t considered proper to have a beard in colonial America.
The only problem with this story is that I couldn’t find anything to substantiate it. Even John Steele Gordon had never heard of a beard tax in Boston, and he’s business historian super-guy.
But he told me Peter the Great instituted a beard tax in 18th Century Russia because he wanted everyone to look like the classy Europeans.
JOHN STEELE GORDON: And the Boyars, as they were called, the nobles, they all wore these long beards. And that became a status symbol because if you had a beard it meant you were rich enough to pay the king for the privilege of wearing one.
In other words . . .
STEELE GORDON: When you’re taxing a whole bunch of people. They can behave in ways that are not expected.
A more recent example is what happened when George H. W. Bush imposed a yacht tax in the early ‘1990s. See, ’cause the rich are smart.
STEELE GORDON: They bought second-hand yachts instead of new ones.
Mm-hm. So instead of pulling in the projected $16 million in yacht taxes, the government made a whopping $58,000 and almost destroyed Maine’s yacht building industry.
John Steele Gordon says that this kind of human response to taxation used to really bother economists.
They wanted economics to be physics, cold and formulaic. But it can’t be. Economics is all about human behavior.
STEELE GORDON: Economics is one of the biological sciences, not one of the physical or mathematical ones. It’s always going to be a soft science because human beings are so unpredictable. Thank heavens. It’d be an awfully boring world if everybody did what you expected ’em to.
For instance, the IRS is expecting me to pay my taxes.
In Boston, I’m Sean Cole for Marketplace.