Free Markets, Free People

Philladelphia

Beware – revenue hungry Leviathan

Keeping with the previous post’s theme, and noting we’ve made the claim in earlier posts that government’s at all levels are revenue hungry (they want to maintain the size of the ravenous beast they’ve developed over the years and they want to do it with your money), this should come as no surprise to anyone:

Between her blog and infrequent contributions to ehow.com, over the last few years she says she’s made about $50. To [Marilyn] Bess, her website is a hobby. To the city of Philadelphia, it’s a potential moneymaker, and the city wants its cut. In May, the city sent Bess a letter demanding that she pay $300, the price of a business privilege license.

“The real kick in the pants is that I don’t even have a full-time job, so for the city to tell me to pony up $300 for a business privilege license, pay wage tax, business privilege tax, net profits tax on a handful of money is outrageous,” Bess says.

I have no idea what Bess blogs about, but unless it is specifically set up to generate income I don’t see any justification for the tax/license. I do see a possibility of a First Amendment issue.

Certainly a blog that generates $50 has an income of sorts. And if, as the story mentions, it was "dutifully reported", then she probably paid whatever taxes were due during that dutiful reporting.

But, as Leviathan loves to do, government just decided to invent a new category of "fees" and licensing (to avoid the tax word) to suck up more revenue. And, most likely, recognizing that most blogs don’t make much revenue they opted for a licensing fee. For instance, if you’re government, which would you rather have from almost 99% of the blogs out there, 5% of their revenue generated or $300?

So, given the nature of blogging and the fact that it has democratized social commentary, could a $300 bogus "licensing" fee be considered a bar to entry? And doesn’t that have First Amendment implications concerning free speech?

You have to love the irony of the license name. A "privilege license". Government, for a measly $300 will allow you the privilege of putting your opinion on line.

Really? I thought that was what the First Amendment – incorporated over all the states – guaranteed without impediment by government. Did I somehow misunderstand the intent?

But the city of Philadelphia – once the seat of freedom – sees it differently:

Even though small-time bloggers aren’t exactly raking in the dough, the city requires privilege licenses for any business engaged in any "activity for profit," says tax attorney Michael Mandale of Center City law firm Mandale Kaufmann. This applies "whether or not they earned a profit during the preceding year," he adds.

So even if your blog collects a handful of hits a day, as long as there’s the potential for it to be lucrative — and, as Mandale points out, most hosting sites set aside space for bloggers to sell advertising — the city thinks you should cut it a check. According to Andrea Mannino of the Philadelphia Department of Revenue, in fact, simply choosing the option to make money from ads — regardless of how much or little money is actually generated — qualifies a blog as a business. The same rules apply to freelance writers.

Essentially, what this will do is have those who wish to blog without interference or “licensing” by government drop any advertising they might presently carry – even the $11 one other blogger the story highlights made in a year.  I.e bloggers will be forced to drop advertising to avoid the fee.  99% will.  Of the possible 1% that make more than the $300 fee, my guess is most will attempt to find a way to claim, legally, that their blog isn’t located in Philadelphia proper.  I’m not sure what you’d need to do to do that, but I’d guess it is possible (have a silent blogging partner who “owns” the blog and is resident in some other part of the country, I suppose).

But, this is government.  This is what it does.  Government, with the economic downturn, is on steroids.  And as it searches for more and more revenue to support itself, it will intrude into your life and on your freedoms more deeply every day. 

A jackal can’t help but act like a jackal – especially when it is hungry.

~McQ

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