Monty Python and Delaware’s tax system – happy together

John Sweeney at The Delaware News Journal writes about my dissertation and Monty Python:

Let’s face it. Delaware bases its tax philosophy on Monty Python’s “Flying Circus.”

A man in a bowler hat once declaimed on the show: “To improve the British economy, I’d tax all foreigners living abroad.”

That’s us. We believe in making foreigners who live elsewhere pay our tax bill. Corporation franchise taxes, unclaimed property and resort property taxes. All paid by foreigners. Our trouble these days is we’re running out of foreigners.

By “foreigners,” I mean the people living in Maryland, Pennsylvania, New Jersey, Washington, D.C., or anywhere else, just as long as they are willing to pay our fees, taxes and tolls so that we don’t have to.

The insight comes from David Levinson, a professor of transportation at the University of Minnesota and the author of the Transportationist blog. Professor Levinson wrote an intriguing journal article of that name in the late 1990s. In it, he laid out the thinking behind “Taxing Foreigners Living Abroad.”

Here’s the idea: Everybody hates taxes. Elected officials are loathe to impose them on voters because voters believe deep in their soul that all of the goodies the government provides (roads, clean water, police, even Social Security checks) should come to them for free. Ideally, some other guy will pay. The elected official’s dilemma is that the other guy votes too. The challenge is to find a way to get someone who can’t vote for them to pay the tax.

Of course, elected officials could cut down on the state’s spending, roll back outdated programs or pass along some health care expenses to employees. But hey, this is Delaware. Government is what we do here.

Therefore, elected officials have no choice but to tax foreigners living abroad.

Much to our dismay, however, the foreigners are wising up.

Professor Levinson, being a transportationist, uses tolls to explain the idea. States try their best to put tolls booths as far away as possible from the hometown population.

The best are border tolls. The state gets the money when the driver enters or leaves the state, not when he drives around in it, which is what local residents would do most of the time.

Delaware, of course, has the perfect example on Interstate 95. It’s right there on the Maryland border. Delawareans do pay the toll, of course, but not too often. However, foreigners driving through the highly profitable toll plaza support a sizable chunk of our road taxes. For say, the 20 or so minutes they spend inflicting their wear and tear on our highways, they have to pay four bucks. And when they go back the other way, they have to pay all over again.

Thank you, foreigners.

They don’t like it, naturally. But what they are going to do about it? Move here and vote against the governor?

It is probably no coincidence that I am originally from Maryland and my cousins live in Pennsylvania.