Category Archives: Law

Why is blackmail a crime?

The Letterman blackmail thing makes me wonder a bigger question: why is blackmail a crime to begin with? If someone is hiding some information that’s socially useful — such as that a man is cheating on his wife, or something with broader social import, such as that a politician is corrupt — why doesn’t society have an interest in making that public? Why should people be punished for revealing socially useful information?

The only reason that comes to mind is that it’s more about the abuse of power than about the revelation of information that people want to keep secret. We want to discourage people who have access to privileged information from revealing that information. But this only makes sense to me in certain public contexts. The FBI can get its hands on information that the rest of the world can’t, and we don’t want them letting it out. It’s not at all clear that we, as a society, care whether a television producer reveals that his coworker is a rake.

What am I missing about the reasons for outlawing blackmail?

(I believe Posner addressed this question in Frontiers of Legal Theory, by the way. When I get back to my bookshelf, I’ll look up what he says.)

For shame, President Obama

The IRS mass-transit benefit

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I’ve been trying to figure out for a while exactly where the tax law says that employers can deduct more for parking fringe benefits than they can for mass-transit fringe benefits. A bit of digging just answered my question, thanks to the IRS’s guide to fringe benefits for employers. That guide points us to Cornell’s law archive, oddly enough; why can’t the IRS archive the laws that govern it?

Specifically, employer fringe benefits are defined within Title 26, Subtitle A, Chapter 1, Subchapter , Part III, Section 132, Subsection (f), Subsubsection (2), to wit:

(2) Limitation on exclusion

The amount of the fringe benefits which are provided by an employer to any employee and which may be excluded from gross income under subsection (a)(5) shall not exceed—

(A) $100 per month in the case of the aggregate of the benefits described in subparagraphs (A) and (B) of paragraph (1), and

(B) $175 per month in the case of qualified parking.

I would still like to figure out why the parking benefit is higher than the mass-transit benefit. It’s not as though mass transit always costs less than $100 per month: I could very easily spend $250 per month shuttling back and forth to Newburyport or Providence. In any case, the tax-law documentation itself doesn’t explain the reason behind the policy.

At work, they asked us what fringe benefits would be useful to us. I suggested that perhaps they spend some money to equalize the parking and mass-transit benefits: pay us $75, or the excess of our mass-transit expense over $100, whichever is smaller.

Which is a nice teachable math moment, for those who are interested. Suppose I incur $200 in mass-transit expenses in a month, so my company reimburses me $175. I owe taxes on $75 of that, because the government only lets my company deduct $100. Suppose I’m in the 28% tax bracket; that means I owe $21 in taxes on the $75. But the people who receive the parking benefit don’t need to pay $21 in taxes. So a company committed to fairness would also reimburse me for that $21. That’s $21 in additional income, on which I would then be taxed. I’d owe $5.88 in taxes, specifically (again, 28%). So my fairness-minded company would reimburse me $5.88.

And so forth, ad infinitum. In total, the company would reimburse me

$75 + $21 + $5.88 + $1.6464 + $0.460992 + $0.12907776 + …

This is known as a geometric series, with ratio .28. It has a finite sum, namely $75/(1-.28) = $75/.72 = $104.17. My company needs to reimburse me $104.17 to give me the same benefit that car drivers already get.

An easier way to arrive at the same conclusion is like so: my company needs to pay me $x to equal the parking benefit. I will be taxed 28% on those $x. So after taxes, I will have $(1-.28)x in the bank. I want my after-tax benefit to equal the $75 that parking users get. So I want (1-.28)x = 75, whence x = 75/(1-.28). Different route, same answer.

My company didn’t think quite as much of my idea as I did. Nice geometric series, though.

John Yoo at Berkeley

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John “Torture Memo” Yoo is a law professor at Boalt. We now find that he wrote this sort of jaw-dropping stuff:

“If a government defendant were to harm an enemy combatant during an interrogation in a manner that might arguably violate a criminal prohibition, he would be doing so in order to prevent further attacks on the United States by the al Qaeda terrorist network,” Yoo wrote. “In that case, we believe that he could argue that the executive branch’s constitutional authority to protect the nation from attack justified his actions.”

Interrogators who harmed a prisoner would be protected by a “national and international version of the right to self-defense,” Yoo wrote. He also articulated a definition of illegal conduct in interrogations — that it must “shock the conscience” — that the Bush administration advocated for years.

“Whether conduct is conscience-shocking turns in part on whether it is without any justification,” Yoo wrote, explaining, for example, that it would have to be inspired by malice or sadism before it could be prosecuted.

This man teaches law? I’m horrified to know that this kind of teaching can make its way into any student’s mind. But I’m also just genuinely curious to know what sort of questions he gets asked, and whether he feels as though he can teach the kids infinitely flexible, infinitely callous sophistry. I would love to sit in on his class. This is the banality of evil, right at Berkeley. California taxpayers: your tax dollars subsidize it.

Anarchist brands, anarchist trademark

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The public-health justification for trademark law is pretty clear: if the law defends my product brand at the point of a gun, I have an incentive to strengthen that brand. It’s a defense against fraudsters latching onto my product’s goodwill. For instance, without trademark law, lots of soft-drink brands would have an incentive to pretend that they’re Coca-Cola. The imitators could funnel sewage into cans labeled like Coke’s, make a few thousand (million?) dollars before the world caught on, and abscond with the money. As it is, there’s a whole apparatus of law that would punish the bad guys here: among other things, food laws preventing sewage from being marketed as beverages, and trademark law to punish false branding.

How would this work in an anarcho-capitalist world? For that matter, how would it work in a slightly more palatable night-watchman state? What defense would we have against fraudulent food sales? I presume that Randians elevate the free market here: private enforcement would take care of it. I would spend lots of money to defend the purity of my brand; I’d hire private enforcers to kneecap those who sell Sewage Coke. So the anarcho-capitalist world would abound with private enforcers. But surely in a free market, increasing returns would quickly lead some private enforcers to be more efficient at it than others (e.g., they have much friskier cudgels). They would sell enforcement for less, and would take over a sizable fraction of the market. The lowest-cost enforcer of private brands, armed with guns, is … the government! Either that, or there would be a great many small trademark enforcers, in which case the economic waste would probably be overwhelming. (To be fair about such things, we’d have to do some math.)

In general, a lot of anarcho-capitalism looks like government by another name. Anarcho-capitalists are all about the sanctity of private property, for instance, but who’s defending their property? Property owners try to protect their land on their own; the strongest one wins. So the owners contract out to private security firms. Those security firms have thereby been granted the power of violence over others. (Well, in an anarcho-capitalist world we’ve all been granted the power of violence over one another.) Again, the strongest ones win. And so forth: the Mafia coalesces. Whether you call it a “Mafia” or a “government,” the result is the same.

You could spin out other stories about how the anarcho-capitalist world evolves. In one of them, maybe the fighting stops before anyone’s coalesced into larger protection rackets. Maybe we all sign a binding agreement that we’ll keep off each other’s property. But what makes that agreement binding? There could be a third-party enforcer of the contract, which is … a government! To enforce that contract for a sufficiently large number of parties, the enforcer would have to be more powerful than any of the parties.

Maybe I’m just not imaginative enough, but I don’t see how anarchism would lead to a better world than the one we have now. In fact it seems that it would lead to exactly the world we have now, after a few hundred or thousand years of destructive convulsions.

Steve Reads