This is the first year in a while in which I have not found myself filing tax returns in more than one state. I am – or at least I used to be – quite peripatetic. Not so long ago, I was on a plane a couple of times a month, off to give a talk at one venue or another. This did not make me rich, but the added income was nonetheless welcome. What was not welcome was that some states withheld income from whatever honorarium I was awarded. I owed no tax on these honoraria – none whatsoever. The amounts were too paltry. But to get back the money that was rightly mine I had the trouble of filing in the state that had done the withholding.
This first happened to me when Victor Davis Hanson had me out to speak at California State University at Fresno (where he was then located), and for a time I presumed that only the People’s Republic of California imposed sanctions of this sort on those who had the effrontery to drop in to do a service. A year or two ago, however, Nebraska dunned me in the same way, and I suspect that this practice will spread as state governments become more grasping. In the case of Nebraska, to add insult to injury, they did the refunds only after they had gone through all of the other income tax returns filed – which is to say, they put off as long as possible paying me back what was, after all, my own. The system in both California and Nebraska is designed to discourage those who earn a bit of change while passing through from ever recovering their property. In effect, Nebraska and California extract a forced loan and then throw obstacles in the way of recovering one’s principle.
For me, this has been an annoyance, which costs me a bit of time and another donation to the friendly folks who make Turbotax. “What must it be like for baseball players, for musicians, and for surgeons?” I wonder. “Can you imagine what it means for those who are truly itinerant? And can you imagine what a mess it would be if every state were to follow the lead of California and Nebraska?”
It is this sort of thing that the American Constitution was adopted to prevent. The commerce clause stipulates that Congress has the power “to regulate Commerce with foreign Nations, and among the several States, and with Indian tribes.” Then it stipulates that “no Tax or Duty shall be laid on Articles exported from any State.” And it forbids the states from laying “any Imposts or Duties on Imports or Exports” if it does not have “the Consent of the Congress,” and, in like manner, it forbids the states from laying “any Duty of Tonnage.”
Now I would readily admit that I am not an article exported from Michigan (though there are days when I feel like an article) and I don't weigh enough to be counted as tonnage, but my services are exported from my home state from time to time, and it strikes me that the withholding laws enacted in California and Nebraska are acts in restraint of trade. If I were in the legislature of Michigan, I would propose a law imposing a head tax on anyone from California or Nebraska bold enough to cross our state line. The way I figure it, if highway robbery is their game, there ought to be reciprocity.