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Sic Semper Tyrannis

Tuesday, December 26, 2006

A Tax By Any Other Name ...

... is still a tax.

And what state Rep. Fred Kessler is proposing is a new tax. Just on whom is debatable, but it's still a tax.

Kessler, a Milwaukee Democrat, wants the unused portion of expired to go to the state rather than the merchant who issued the gift card.

Kessler said millions of dollars a year go unused by gift card recipients, and retailers are allowed to book the unused values after the cards expire. He cited figures from Consumer Reports showing that 19% of all gift cards are not used because they are lost or expired.

Kessler called that a "windfall," which he said could be used to support schools, health care or roads. Under his bill, after a one-year expiration date on all cards, 80% of the value of unused cards would go to the state treasury. Merchants could keep 20% of the value of an unused card to pay for processing, Kessler said.

"I'd rather have people spend the money and use the gift card, but if they aren't, I'd rather the state get the money," Kessler said.

Excuse me, Rep. Kessler, but what makes you think the state is entitled to that money?

One can argue that this is really a tax on the merchant, since only 20 percent of the unused value would go to the merchant. For those of you who graduated from Racine Unified, that means if $10 of a gift card goes unused, the state would get $8 and the merchant $2. In other words, a tax on business.

One can also argue that this is a tax on the gift-giver, the person who buys the gift card. Let's use the same example, once again for those who graduated from Racine Unified, if you buy a $50 gift card and the recipient of your gift uses $40 of your money and the gift card expires, under Kessler's proposal, you just donated $8 unwillingly to the state — a tax.

Again — and if the flat-out arrogance of this proposal doesn't outrage you, then virtually nothing will — why does Kessler believe the state is "entitled" to this money, unless he believes the state is entitled to all money.

And, schools, health care and roads already get enough of my money.

Cross-posted at Texas Hold 'Em Blogger.