Tax Code Follies #1: The "Tools of the Trade" Exemption

As a student taking tax law, I occasionally find myself reading passages that simultaneously amaze and depress me.  I'm sure many of these provisions were well-intentioned, but the incentives they create are unbelievable.  I'll try to post them as I find them.  Today's inaugural folly: the "tools of the trade" exemption.

Short description: The IRS normally doesn't let you deduct expenses incurred commuting to work.  However, it grants an exception for expenses incurred bringing "tools of the trade" into work.  Makes sense, right?  But there's more: the deduction only covers the costs incurred for the tools, not any additional costs covered for you to commute with the tools.

How it plays out: A doctor who routinely commutes to her office via subway realizes she's going to have to take several patient charts home for the evening.  If she takes a cab home, lugging the charts, she cannot deduct the expense.  If she pays the cab to take her charts home for her (and keep the meter running until she arrives) and she takes the subway home, she can deduct the entire cab fare (which would be assuredly higher with the waiting time). 

Perverse incentives created:  Double-commuting, potential issues of leaving sensitive documents unattended. 

NYT Paywall Incentives: Become More Partisan

I love to read the New York Times, and I think the paper's reporting and columnists are some of the best.  But, since the institution of the NYT paywall earlier this year, I have changed my NYT reading behavior.  The paywall's rules are a little confusing (it states a hard-and-fast article count, but then creates exemptions like the US tax code), but mostly I hate the thought of not accessing a story I really want to read at the end of the month.  So I read fewer NYT articles, and I choose more selectively.

But the "more selectively" point creates the (presumably) unintended consequence of the paywall: I read less bipartisan material.  I prefer a few of the NYT's right-leaning journalists (e.g., David Brooks, Ross Douthat) over some more liberal ones (e.g., Maureen Dowd, Frank Rich), so those are the columns I "consume" within my free allotment.  This reaction isn't uncommon: "confirmation bias" suggests people generally read things with which they agree.   Author Bill Bishop notes we've even becoming residentially self-segregated by political beliefs.

As a result, I read fewer left-leaning articles from the NYT.  I backfill from other sources (WaPo still lets me read E.J. Dionne, Ezra Klein, and the like gratis), but I wonder if the NYT considered these perverse incentives before they established their particular model.  They don't care about my particular reading habits, to be sure, but it weakens my loyalty to them as a paper, and I'm sure I'm not alone.  If David Brooks were to leave, readers like me might now leave too... and that will hit their bottom line sooner or later.