Paul Jacob

Taxation has a tendency to sink into the arbitrary.

It’s fairly easy to tax, by simple percentage of price, items that are exchanged for money at discrete moments in time and between separate agents.

But taxing the value of something that is not money being given (gift tax), transported (tariff), or lived in (real estate tax) is often hard to figure. What is the value?

It gets murky.

And there’s nothing murkier, today, than trying to tax fossils.

Nearly a month ago, the BBC broke the droll tale of a whale fossil, the Basilosaurus Isis. (Since the first outing, the story’s appeared as “human interest” nearly everywhere.) Excavated in the Valley of Whales, in Egypt, it was sent to the University of Michigan to be assembled and studied. Then the U.S. paleontologists sent it back to Egypt, to be put in a new museum.

But there are a few problems. This new museum is said to commemorate, catalog and ballyhoo the aforementioned valley in northern Egypt that contains numerous fossils, particularly of prehistoric whales. Unfortunately, the museum hasn’t been built yet. And the whale’s too big to fit in existing museums. Some say a fit home can be put up in two months.

So is that why the fossil is housed, currently, at Cairo Airport’s cargo village?

Maybe. But the story is longer than you might think.

Years and years ago, long before the first bureaucrat began figuring the best way to extract wealth from the first dusty digger of rocks, the Tethys Sea began to dry up. The geography and fossils left behind fascinate some folks more than does the Valley of the Kings. (In Egypt, it seems, every valley shall be exalted.)

What’s amazing about this particular fossil is that it is the mineral remains of a mammal that had moved from land to water not long before. It is one of those “missing links” that Darwin predicted we’d find. It’s found. Along with quite a lot of others.

And yes, this whale had feet.

So you might see why this particular species is valuable. And this particular example is extra valuable, since it is the only whole fossil of Basilosaurus Isis’s remains.

Which begs the question: How much?

We are told there is no wide market in fossils. Too bad. (An open market would actually solve a lot of problems associated with the black market and, at the same time, aid science, since authentication processes would be required, and therefore give market value to paleontological expertise. But that’s in the future . . . not our experience.) Sans markets, how do you establish value?

I mean, how do you, if you are an Egyptian customs agent?

I guess you say, “Hey: Ten grand a leg!” and demand $40,000.

That, in any case, seems to be the current situation. The reporter tells us that the whale fossil is being held up in Egyptian customs. A follow-up article informs us that “three environmental NGOs have launched a campaign demanding the release” of the reconstructed remains.

It’s one thing to send a fossil up the Nile. It’s another to send it through a bureaucratic bog.

There must be a lot more to the story. Do mummies returning to Egypt get taxed this way? Egyptian customs officials deny the story. The denial seems, however, a bit like a river in Egypt: The story’s unlikely to dry up so easily, reflecting, as it does, a perennial truth about bureaucracy. Bureaucracies don’t listen to common sense. They follow the rules. As bureaucrats understand them, and they’re not in the business of getting out of the way of science or ancient whales

But until the story settles out, and the truth appears in strata, I’ll settle for a more down-home take-away: Arbitrary taxation is bad. Taxes that require fixing a value outside of actual market transactions are especially troublesome.

That’s why I don’t like property taxes. The valuation of the house or land, in question — aside from an actual sale — sometimes becomes pure fiction.

That’s why I prefer a retail sales taxes to the horrible, European-style VATs.

That’s why I don’t like tariffs, even if they are in the Constitution.

No sane person likes being taxed. But taxation that requires an arbitrary fixing of value — taxation that requires bureaucratic invasion and appraisal of private property — is far more intrusive by nature, and more likely to distort economic relations than, say, a simple transaction tax fixed as a percentage of money on one side of the transaction.

We should find ways to avoid the vague and arbitrary taxes. First and foremost.

The best way to do this is to decrease (and I mean really decrease) the size of government, so we aren’t tempted to tax everything in sight.

Including the remains of long-legged whales.


Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.