Business Tax on Freelance Writers Heads to Virginia Supreme Court
Plus: The roots of the housing crisis, the U.S. Supreme Court reconsiders Miranda warnings, a judge halts Kentucky's abortion law, and more...
"Democratic accountability is very important where taxes are concerned." In 2018, Charlottesville, Virginia, decided that freelance writers needed a business license. The local government levied thousands of dollars in back taxes on local authors who had not obtained such a license or previously paid business license taxes. The city and two novelists have been fighting about it for years since. Now the matter is being considered by the state's Supreme Court.
The writers—Corban Addison and John Hart—are both being represented by the Institute for Justice (IJ). In lawsuits against the city and county, Addison, Hart, and IJ seek a refund of the business license taxes the two authors paid and a ruling that these licenses and fees are unconstitutional under the First and 14th Amendments.
"The city and county business codes cover dozens of occupations but don't mention writers, who therefore had no notice that they would be taxed," IJ noted last year. "What's more, other kinds of media like newspapers and magazines are specifically exempted."
"It felt like the law wasn't designed to tax me," Addison told CBS 19 News. "But instead, the ministerial agent here, the Commissioner of the Revenue, just decided willy-nilly in 2018 to start taxing authors using a provision that wasn't designed to tax me."
In January 2021, a state circuit court ruled that applying the business license tax to freelance writers was unconstitutional. "The City has argued that [Addison] provides a service or business to his publisher. The Court disagrees. The Court finds the argument that [Addison] provides a service to this publisher to be forced, strained, or contrary to reason," wrote 16th Judicial Circuit Judge Claude Worrell, who rejected the First Amendment claim but accepted the 14th Amendment–based argument that the law was unconstitutionally vague.
The city appealed, and this week the matter came before the Virginia Supreme Court. (Hart's lawsuit against Albemarle County is on hold pending this appeal.)
"It's the intent of the City Council that any business that's operated within the city, unless specifically exempted, is to be taxed," city attorney John A. Rife told the Court on Wednesday. "Unlike what the lower court suggests, that we should name every occupation that's out there, that's simply not possible."
IJ lawyer Renee Flaherty argued that the city was impermissibly leveling an income tax on authors. The Daily Progress reports:
Flaherty said interpreting the ordinance the city's way essentially turns the license tax into an income tax, which Virginia municipalities aren't allowed to impose.
"If the city's position is that it basically wants to tax all non-employment income from anyone who files a Schedule C, that is just stretching a business license tax and turning it into something else," she said. "Democratic accountability is very important where taxes are concerned. People plan their entire lives around their tax liabilities."
As IJ attorney Keith Neely told The Daily Progress, "this idea that the taxes should be clear, and that they should put individuals on notice that they're subject to the tax, are important principles."
FREE MINDS
Supreme court considers Miranda warnings. "You have the right to remain silent. Anything you say can and will be used against you in a court of law. You have a right to an attorney." And so on… Many Americans who have never been arrested can cite at least part of what's known as a Miranda warning by heart, thanks to its ubiquitous recitation on TV crime dramas. Miranda rights —established by the 1966 case Miranda v. Arizona—now seem an immutable and fundamental part of the U.S. justice system.
But are such warnings a constitutional right? That's something the U.S. Supreme Court is currently pondering as part of a case involving cops who failed to recite the warnings to a suspect in Los Angeles.
"The question arose in a civil rights case brought by Terence B. Tekoh, a hospital attendant who was accused of sexually abusing an immobilized patient receiving an emergency MRI," explains The New York Times.
Mr. Tekoh was questioned at length by Carlos Vega, a deputy sheriff in Los Angeles.
The two men offered starkly divergent accounts of the nature of the questioning, but there was no dispute that Mr. Vega did not give the Miranda warning, that Mr. Tekoh signed a confession admitting to the assault, that a state trial judge admitted his confession into evidence or that a jury acquitted him.
Mr. Tekoh then filed a lawsuit against Mr. Vega under an 1871 federal civil rights law known as Section 1983 that allows citizens to sue state officials, including police officers, over violations of constitutional rights.
The case, Vega v. Tekoh, No. 21-499, was complicated by factual disputes over whether Mr. Tekoh had been in the sort of custody that required a warning or had been subject to coercion. In a Supreme Court brief, Mr. Vega's lawyers said Mr. Tekoh was contrite and remorseful and wrote his confession without prompting.
A lawyer for Mr. Tekoh, Paul L. Hoffman, gave a very different account on Wednesday. "Mr. Tekoh says he's put in a closed room for an hour," Mr. Hoffman said. "He is berated and basically threatened with deportation with an officer with his hand on a gun."
The justices considered whether Mr. Tekoh could sue even if he could prove his version of events. That turned on the constitutional status of Miranda, which had been the subject of much criticism in the 1980s and '90s and a congressional effort to overturn it.
A full transcript of the oral arguments can be read here.
FREE MARKETS
Stop blaming millennials for a housing crisis created by government policies. "Home prices and rents have skyrocketed, and available homes for sale recently reached record lows. Bidding wars are fierce. And if a spate of recent news coverage is to be believed, millennial 'Zoom towns' are to blame for the resulting housing crisis, particularly in lower-cost areas," writes Catherine Rampell at The Washington Post.
Apparently, the problem is not the chronic underinvestment in new construction over the past decade. Nor is it exclusionary zoning and other NIMBYist obstruction of more, and denser, housing. Never mind that boomers are increasingly hanging on to their many-bedroom domiciles rather than downsizing upon retirement, in part because of state tax laws that reward incumbent homeowners for staying put.
Ignore the persistent supply-chain problems and tariffs that have increased the cost and build time for new construction.
No, the problem is us young(ish?) whippersnappers. We entered our prime childbearing years and then callously decided to put a roof over our children's heads. If once millennials were accused of failure to launch, now we're faulted for launching too aggressively.
Reason has covered the housing crisis a lot, laying the blame at some of the things Rampell identifies: exclusionary zoning, tariffs, and other government policies. For more, see:
- "Antiquated Zoning Laws Are Worsening the Housing Crisis"
- "Is America Finally Waking Up to Its Government-Created Housing Crisis?"
- "Density or Sprawl? How To Solve the Urban Housing Crisis"
- "How the War on Sprawl Caused High Housing Prices"
FOLLOWUP
Judge halts Kentucky abortion law that forced clinics to stop service. In a ruling released Thursday, U.S. District Judge Rebecca Grady Jennings temporarily blocked Kentucky's new abortion law from taking effect. The state's two abortion providers—Planned Parenthood and EMW Women's Surgical Services—have sued over the measure after pausing operations in the wake of its passing.
"Both of the clinics indicated Thursday that they would immediately resume abortion services," reports the AP. "Jennings' order did not delve into the larger issue of the new law's constitutionality. Instead, it focused on the clinics' claims that they're unable to immediately comply with the measure because the state hasn't yet set up clear guidelines. The judge said her order does not prevent the state from crafting regulations."
QUICK HITS
• The Supreme Court says Congress can exclude Puerto Ricans from some federal disability benefits. "Just as not every federal tax extends to residents of Puerto Rico, so too not every federal benefits program extends to residents of Puerto Rico," wrote Justice Brett Kavanaugh in the court's 8–1 opinion.
• A cop who arrested a high school student on dubious "terrorizing" charges cannot be sued over the incident, a federal court says.
• Attention, New York–area Reason readers: Come out on Monday, May 2, for a live taping of The Reason Interview With Nick Gillespie, featuring Ideas Beyond Borders co-founders Faisal Saeed al Mutar and Melissa Chen. (Ideas Beyond Borders translates works about pluralism, science, civil liberties, and critical thinking into Arabic and distributes them for free as ebooks throughout the Middle East.) Tickets are $10. More details here.
• In France, the "authoritarian establishment faces off against the even uglier authoritarianism of the far right," explains Veronique de Rugy.
• Transportation masking rules "serve as a good example of how prudent measures can turn into little more than symbolism," writes Tom Nichols at The Atlantic.
• Reason TV interviews rationalist libertarian sex worker and data scientist Aella: