NCPA - National Center for Policy Analysis


March 1, 2006

Informally known as "jock taxes" -- an extension of commuter taxes to visiting athletes and entertainers -- they were originally sold as a way to get money from mega-wealthy stars, whose income was high and whose travel schedules were transparent. But time and technology have enabled states and cities to reach deeper, and so they are, says USA Today.

These types of taxes allow states to grab ever larger shares of their budgets from people with no vote -- and no way of complaining about the paper work they face. There's an expression for this: Taxation without representation.

Other problems with these transient taxes include:

  • They are imposed unevenly. Inevitably, those who are most easily tracked will be taxed while others doing essentially the same thing are not.
  • The states are stealing from each other. Because most states give their residents and businesses a credit on taxes paid elsewhere, these taxes divert revenue from the state that provides the people and companies the most services.
  • The taxes can result in double taxation. Residents of states that do not give credits, or use other means besides income taxes to fund government, pay more than their fair share.

States and cities originally imposed commuter taxes on the grounds that they provide roads, police and other services to non-residents. For that reason, there might be an argument for them in places that absorb large numbers of out-of-state workers every day, says USA Today.

But the newer versions reach way beyond the original justification. And at far too high a personal cost. Congress has broad authority over interstate commerce and should impose some reasonable limits. Without reforms, a lot more people will be spending more time with accountants, says USA Today.

Source: Editorial, "Tax on business travelers?" USA Today, February 28, 2006.

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