This Just In: Size Matters – At Least According to the IRS

Alan Cole of the Tax Foundation provides a succinct summary of the key issue:

In filing one’s taxes, it may be necessary to distinguish between breast implants that are merely “large,” and breast implants that are “extraordinarily large.”

The relevant ruling on this subject came in 1994 in a case known as Hess v. Commissioner. The plaintiff, a self-employed exotic dancer, had implants that expanded her bust size to the size 56FF. For tax purposes, she treated these as a deductible business expense on her schedule C. The IRS contested her deduction.

The purpose of deductions for business expenses is to avoid multiple levels of taxation on goods that are put together cooperatively by several businesses. This is good tax policy.

However, a substantial difficulty in this is determining the difference between consumption goods and legitimate business expenses. A carpenter should be able to deduct the cost of wood he uses to create furniture to sell – tax is paid on the income used to purchase it, and no further tax is necessary. But deductions are not a free excuse to make all of one’s income tax exempt by listing a bunch of personal purchases, and the IRS is right to be skeptical of abuse of this provision.

The relevant issue in Hess was whether breast implants – traditionally thought of as a luxury good bought for personal benefit – could be considered a legitimate business expense. Given that the plaintiff was an exotic dancer, she had a fair argument. But in general, taxpayers aren’t allowed to treat personal appearance expenditures as business expenses unless they aren’t suitable for personal use. Hess, arguing pro se, convincingly established that her implants were inconvenient in everyday life due to the sheer enormity of her breasts. The courts ruled in her favor:

Because petitioner’s implants were so extraordinarily large, we find that they were useful only in her business. Accordingly, we hold that the cost of petitioner’s implant surgery is depreciable.

That seems to make sense.  We could add that gravity will do a pretty good job of depreciating those assets too.

Krugman wrong, an ongoing series

Paul Krugman commented recently on a piece by Ezra Klein, who in turn was writing about the work of Yale’s Dan Kahan. Kahan’s Cultural Cognition Project studies how culture and ideology can cause people to process information in ways that support their biases and prejudices. Rather than reasoning dispassionately to reach the truth, people choose the conclusion they prefer, and then form a rationalization for that conclusion. Klein’s summary of Kahan’s work pointed out that such cognitive biases can affect people on the political left as well as the right.

Krugman objected to this symmetry, and argued that cognitive bias must affect primarily the political right, not the left. His argument was basically that left-liberals like him are obviously smart, while conservatives are stupid and obviously wrong. Hence it must be only conservatives, not liberals, who do not properly process information.

But here’s the thing: the lived experience is that this effect is not, in fact, symmetric between liberals and conservatives. Yes, liberals are sometimes subject to bouts of wishful thinking. But can anyone point to a liberal equivalent of conservative denial of climate change, or the “unskewing” mania late in the 2012 campaign, or the frantic efforts to deny that Obamacare is in fact covering a lot of previously uninsured Americans? I don’t mean liberals taking positions you personally disagree with — I mean examples of overwhelming rejection of something that shouldn’t even be in dispute.

Well, Krugman’s argument got back to Dan Kahan, and apparently it gave him a good laugh.

After “laughing [himself] into a state of hyperventilation,” Kahan penned a more serious response, pointing out how Krugman’s essay was itself evidence of how “ideologically motivated reasoning is in fact perfectly symmetric with respect to right-left ideology.” Explains Kahan:

The test for motivated cognition is not whether someone gets the “right” answer but how someone assesses evidence.

A person displays ideologically motivated cognition when, instead of weighing evidence based on criteria related to its connection to the truth, he or she credits or dismisses it based on its conformity to his or her ideological predispositions.

Thus, if we want to use public opinion on some issue — say, climate change — to assess the symmetry of ideologically motivated reasoning, we can’t just say, “hey, liberals are right, so they must be better reasoners.”

Rather we must determine whether “liberals” who “believe” in climate change differ from “conservatives” who “don’t believe” in how impartially they weigh evidence supportive of & contrary to their respective positions. . . .

That Krugman is too thick to see that one can’t infer anything about the quality of partisans’ reasoning from the truth or falsity of their beliefs is … another element of Krugman’s proof that ideological reasoning is symmetric across right and left!

For in fact, that “the other side” is closed-minded is one of the positions that partisans are unreasoningly committed to.

Thus Krugman, by demonstrating his own bias and lack of self-awareness, ended up validating the hypothesis he set out to disprove. Good to see that, after such a long dry spell, Krugman was finally able this week to make a small contribution to science.

Worth quoting in full is the comment at Volokh by WuzYoungOnceToo.

Is this the same Paul Krugman who, literally within hours of the breaking of the news of the massacre by Jared Loughner in Tuscon…before the blood in the parking lot had even dried…penned a hysterical op-ed piece for the NYT (which they foolishly published) blaming all of the usual boogeymen on the right (including Sarah Palin, somehow) for creating the shooter, even though he knew next to NOTHING about Loughner at the time? The same rational, unbiased, principled processor of facts who…after it was discovered that Loughner was a psychopath with no discernible left-right ideological bias, and who was influenced by stuff from all over the map (from Mein Kampf to The Communist Manifesto)…later, in a follow-up op-ed, not only did not acknowledge and retract his knee-jerk partisan stupidity, but actually doubled-down on it? That Paul Krugman?

If Krugman is not a laughingstock, he should be. “Boy, if life were only like this” more often.

9 Words for the Disinterested Reader

This excerpt from Charles Murray’s new book provides examples of the misuse of some $.02 words.  Some of these may seem pedantic but, to quote Mark Twain, “The difference between the right word and the almost right word is the difference between lightning and a lightning bug.” Anyway (anyhow?) this one is pretty funny:

Literally used to mean figuratively.
The percentage of times that literally is used correctly verges on zero. Ninety-nine percent of the time (I’m estimating), it is misused to mean figuratively. In almost all of the other one percent, literally is used as a sloppy intensifier. The only correct use of literally that comes to mind is the sign-off of George Burns and Gracie Allen, former vaudevillians who had a television sitcom in the 1950s. She played the role of a ditz. At the end of the show, George would say, “Say good night, Gracie,” and she would say, “Good night, Gracie.” She took George’s instruction literally. Such opportunities to use literally correctly don’t come up often.

There’s one and only one ‘free speech zone’

Getting considerable attention in the news recently was an armed standoff between federal agents and a Nevada rancher. Despite our usual skepticism regarding the use of government force, in this instance the feds have shown admirable restraint, at least for now. Furthermore, as detailed in this piece at, it’s the government, not the rancher, that has the law on its side.

At least one aspect of the government’s response to the conflict was, however, objectionable. The feds tried to cordon off protestors, who were siding with the rancher, into a ‘First Amendment Area.’

First_Amendment_AreaThis action was reminiscent of the tactic commonly employed by university administrators of relegating speech on campus to circumscribed ‘free speech zones.’ As we’ve pointed out previously, however, there is in fact one and only one First Amendment Area.


Reminder: Social liberals aren’t liberal

In light of our recent discussion, in the post below, of the liberal festival of fascism, we found that Kevin Williamson had some insightful points in his latest article at Politico. Williamson argues persuasively that Americans aren’t ready, unfortunately, for a libertarian candidate like Rand Paul. Although there’s a huge swath of voters who describe themselves as fiscally conservative and socially liberal, Williamson argues that Paul is more likely to alienate than to unify conservatives and liberals. The problem as Williamson sees it is that so-called fiscal conservatives are not really conservatives and that social liberals are not really liberal. We want to focus in particular on Williamson’s argument about social liberals.

Here’s where the English language fails us: “Liberal” and “libertarian” come from the same linguistic root, meaning “liberty,” and many libertarians will describe themselves among friends as “classical liberals”—political heirs to the Whigs and the Manchester free-traders. But “socially liberal” and “socially libertarian” today mean almost precisely opposite things. If there is one thing our “social liberals” hate, it is liberty. In their view, you’re free to do as they please.

Take the case of the Christian bakers and photographers who do not wish to participate in same-sex weddings because of their religious and moral views. Paul takes the classical liberal view, which is that people should be allowed to make their own decisions based on their own values, and that if a baker’s belief offends you, then you can criticize him, boycott him, give him the full Duck Dynasty treatment—but you cannot use the strong arm of the state to compel him to put two tuxedoed gentlemen on top of a cake.

America’s so-called social liberals think that amounts to Jim Crow for gay people. Paul’s instinct is to get marriage entirely out of the federal tax code and to let the states define marriage for themselves. For social liberals, that is, at best, a punt. On the subject of gay marriage, they do not want a skeptical federalist—they want a president who is categorically in favor of gay marriage. They do not want somebody tolerant, but somebody committed, and willing to use the federal government to make their own preferences national policy…In fact, whether it is abortion, guns, public-school curricula or the all-important issue of dropping the federal civil-rights hammer on noncomformist bakers, Paul can count on bitter, unified opposition from liberal social-issue voters.

Indeed, in the area of social policy, modern liberals take anything but a ‘live and let live’ perspective; instead, they seek to use the power of the state to enforce their agenda in the social sphere, just as readily as they do in the economic sphere. Even in the area of sexual and reproductive freedom, modern liberals enjoy a pro-freedom reputation that seems unwarranted. Liberals back feminist attacks on the rights of heterosexual males, such as denying due process rights to college men accused of sexual assault. Liberals are also quick to throw reproductive rights overboard in the name of preventing ‘environmental degradation’ due to ‘overpopulation.’ Bowdoin’s Jean Yarbrough recently commented on the “frightening” research agenda of her liberal colleague, Sarah Conly.

On the Bowdoin College Philosophy Department website, Conly states that her next project is tentatively entitled “One: Do We Have A Right to More Children?” In it, she proposes to argue that “opposition to population regulation is based on a number of mistakes: that the right to have a family doesn’t entail the right to have as many children as you may want; that the right to control one’s body is conditional on how much harm you are doing others; and that nothing in population regulation entails that those who break the law can be forced to have abortions, or subject to any sort of punishment that is horrific. If population growth is sufficiently dangerous, it is fair for us to impose restrictions on how many children we can give birth to.”

So apparently, the liberal idea of reproductive freedom is that you’re free to not reproduce. When ‘liberals’ advocate policies that are closer to Mao Zedong than to John Stuart Mill, the term truly has come to mean its opposite.

Modern liberals believe in freedom only for themselves, to pursue their own interests. The people who don’t share the liberal worldview, or have different interests, liberals want to shackle. That is who they are.

This Week in Liberal Fascism

We wrote a few weeks ago about the fascist tendencies of the global warmists. Specifically, seminar participants at Harvard suggested that skeptics of the climate agenda could be charged under the RICO Act, a statute usually used to prosecute the mafia. Well, now the idea of bringing criminal charges against climate skeptics has been seconded by Lawrence Torcello, a philosophy professor at Rochester Institute of Technology.

We have good reason to consider the funding of climate denial to be criminally and morally negligent. The charge of criminal and moral negligence ought to extend to all activities of the climate deniers who receive funding as part of a sustained campaign to undermine the public’s understanding of scientific consensus….

What are we to make of those behind the well documented corporate funding of global warming denial? Those who purposefully strive to make sure “inexact, incomplete and contradictory information” is given to the public? I believe we understand them correctly when we know them to be not only corrupt and deceitful, but criminally negligent in their willful disregard for human life. It is time for modern societies to interpret and update their legal systems accordingly.

Yeah, well, when you call for your political opponents to be arrested, you might be a fascist.

But there’s more. Aspiring thuglet Adam Weinstein also added his voice to the liberal chorus calling for criminal prosecution of political opponents.

I’m talking about Rush and his multi-million-dollar ilk in the disinformation business. I’m talking about Americans for Prosperity and the businesses and billionaires who back its obfuscatory propaganda. I’m talking about public persons and organizations and corporations for whom denying a fundamental scientific fact is profitable, who encourage the acceleration of an anti-environment course of unregulated consumption and production that, frankly, will screw my son and your children and whatever progeny they manage to have.

Those malcontents must be punished and stopped.

Deniers will, of course, fuss and stomp and beat their breasts and claim this is persecution, this is a violation of free speech.

Yeah, Adam, the reason why we say that arresting people who disagree with you about public policy violates free speech is because it, you know, violates free speech. Oh, and it is also fascist.

Harvard, RIT, and Gawker–three public calls for criminal prosecution of free speech in less than a month. As Auric Goldfinger said, “Once is happenstance. Twice is coincidence. The third time it’s enemy action.” In this case, it’s enemy action by liberal fascists who hate human freedom.

Jonah Goldberg, call your office…


Why Thieves Steal Soap

Here is an interesting discussion of the market for low level crime:

At the Walgreens on Market Street in San Francisco, customers often need to call a store employee to unlock a display case for them. The customers are not tech titans buying laptop batteries or wealthy San Franciscans purchasing jewelry or top-shelf liquor. Workers unlock cases of baby formula, shampoo, and soap for a mix of office workers and low-income customers.

It’s well known that pharmacies need to protect their stores of cold medicine, which methamphetamine cooks like Jesse Pinkman can use to make product. But why soap? Is a $6 bottle of Dove body wash really worth the squeeze?

Walgreens realizes that it is; retail assistants explain that the locks prevent thefts. Understanding why requires an appreciation of the illicit market for stolen goods.

Clearly, the best item to steal is money.  Since money is liquid, portable and divisible the best near-money products are items such as cigarettes, razor blades, and yes, soap:

In fact, the consistent demand for products like soap on the illicit market can make it as good as stealing cash. Last year, for example, New York Magazine ran a story describing how thieves steal Tide Detergent to buy drugs. The piece opens by describing one Safeway store that lost $10,000 to $15,000 a month to thefts of Tide detergent.

Products like cigarettes and soap perform some of the major functions of money very well. Since there is a consistent demand and market for them, even when they’re not on store shelves, they retain their value. (Unlike an iPod, they never become obsolete.) Since they have standard sizes, they can also be used as a unit of account. You can pay for something with one, five, or ten packs of cigarettes depending on its value. In areas where fences or other buyers are always willing to purchase stolen products like soap, it’s just as good as money.

For thieves, the ubiquity of a product and the presence of a large illicit market for it is more important than its actual retail value. Small time burglars can’t keep stolen goods in warehouses, waiting for a buyer and marketing products to people willing to pay a premium for a unique item. It may seem surprising that Walgreen keeps some of its cheapest items locked up, until you realize that thieves care more about an item’s ubiquity in illicit markets more than its retail price.

France: Just another failed socialist state

Modern liberals have always been fond of France’s social system, and why not? The French welfare state is a liberal dream, designed to protect the citizen from all of life’s contingencies: unemployment, disability, illness, age, you name it. The government pays for health care and for education all the way through the university level. University students even get free meals. Labor unions are coddled. And in France, everyone is progressive. The progressive agenda moves forward unimpeded by the sort of retrograde social forces found in America. In France, progressives don’t have to deal with gun-toting rednecks, Tea Partiers, chillbilly Sarah Palin types, Pentecostals, or libertarian economists. A French economist once told us that, in France, maybe no more than 20 people in the whole country has ever read F. A. Hayek.

Given the lack of political opposition, French progressives have long enjoyed a relatively free hand to implement their ideas of governance. All the top bureaucrats and politicians even attend a special school–l’École nationale d’administration– where they learn to administer the welfare state scientifically. What could go wrong?

Well, what could go wrong is what always goes wrong with socialist systems–a gross distortion of incentives. All those welfare entitlements have to be paid for with exceedingly high taxes, and the high taxes discourage work, innovation, and risk taking. Special interests get laws and regulations put in place that stifle competition. As a result, economic growth and economic opportunity dry up. As explained in the superb video report embedded below, France’s best and brightest are now fleeing the country. With little economic opportunity, half of France’s young people say they would leave the country if they could.

For those of us who understand that freedom works and statism doesn’t, none of this is surprising. France is just another in a long line of failed socialist states. But the statists never seem to learn. As an experiment, students should try asking their liberal professors what they think of France’s social and economic system. They will no doubt speak approvingly of France, especially in comparison with the United States. But those of us who are relatively more reality-based know that the truth is rather different.


No list of federal crimes exists

Another amazing job done by the federal government.

Two objections to the current state of federal law have been that no one knows how many federal crimes there are, and no one can easily find them all…

No List Exists

The American legal system has always presumed—often incorrectly[3]—that every person knows every criminal law. In fact, no one—no police officer, no prosecutor, no judge, and no law professor—knows all of them.[4] One reason why this problem has existed is that there is no compendium of all federal criminal laws that a person—or a lawyer—could turn to when issues arise.

In the past the Justice Department and the American Bar Association (ABA) separately attempted to prepare a list of federal offenses. Neither the Justice Department nor the ABA succeeded, no other component of the executive branch has picked up the baton since then, and no comprehensive, easily accessible list exists today…

The federal government has the legal and moral responsibility to make the federal criminal laws known to the public before someone can be charged with a crime. To date, it has not met that responsibility.

So the federal government creates all these laws that the people must obey or face criminal prosecution, but then the government provides no way for the people to see what those laws are. And since ignorance of the law is no defense, the public faces the risk of running afoul of laws they don’t even know exist. The government’s irresponsibility increases the burden of responsibility for the citizen. This reminds us of the high error rate on advice given by the IRS.

The January 2004 report of the Treasury Inspector General for Tax Administration [TIGTA] confirms the IRS’s error rate for advice it gives at its hundreds of walk-in Taxpayer Assistance Centers (TACs) remains unacceptably high.

The report reveals the IRS provided “flatly incorrect answers 20 percent of the time.” In another 15 percent of the cases, the IRS provided a “correct” answer without first obtaining the background information necessary to provide a correct answer–a serious oversight when providing tax advice.

But of course, the IRS is not responsible if you file an incorrect return on the basis of their bad advice. The taxpayer always retains full responsibility. The government can screw up on its own tax rules, but the taxpayer can’t.

Likewise, airport security run by the TSA is incompetent, inefficient, and irrational, and has never caught a terrorist…but you have to just shut up, take off your belt and shoes, and keep that line moving.

A vivid way to see the extent to which the people have lost control of their own government is to reflect how often the government cuts the citizen no slack, despite itself being inept and bungling in the same field. In a truly free republic it would be the other way around; the government would need to get its act together before the public had any obligation to pay or to obey.

Cost of Flying

This recent Los Angeles Times article focuses on a not often discussed risk of flying:

As the sea of luggage twists and turns down rollers from terminals at Los Angeles International Airport, the bags stop briefly at large platforms where workers separate them for flights across the world.

It is there, police said, that a group of baggage handlers pulled off one of the largest property heists in airport history.

For months, detectives said, workers rifled through bags looking for items to steal.

Anyone who has spent time around an airport knows there is no such thing as secure luggage.  We all know that TSA rules prevent you from locking your bags, but few travelers realize how exposed their luggage is as it makes its way from the airport ticket counter to the carousel at their destination airport. So here is some advice: never leave anything truly valuable in checked luggage!