Keene’s “Robin Hood” Beats City Hall in Court

Last I checked in with the creative tax resisters of Keene, New Hampshire, they’d taken to following around parking enforcers and quickly filling expired meters in front of them so as to reduce the number of tickets they could write. They’d leave cards under the windshield wipers of the cars they’d rescued signed “Robin Hood and his Merry Men.” They also encouraged the parking enforcers to resign.

The city filed for a restraining order against the activists, saying that they were harassing the parking enforcers. The Merry Men countered that this had nothing to do with harassment — the city was just angry at the interruption of its revenue stream.

A judge has now taken the side of Robin Hood. Judge John C. Kissinger, Jr., dismissed the two cases filed by the city: one for a restraining order and another for monetary damages:

The Court agrees with the Respondents that their free speech rights under the First Amendment of the Federal Constitution will be violated by permitting the City to move forward on any of the claims in this action or the more recent action or by granting the requested preliminary and permanent injunctive relief.

Over the course of the trial, one of the parking enforcers said he had resigned to avoid the harassment, and the city director of finance testified that because of this resignation there had been a loss of ticket revenue and additional costs to the city. In addition, the city had spent money to hire a private investigator to shadow the Merry Men as they shadowed the parking enforcers.

Joseph Thorndike, at the Tax Analysts blog on Forbes, brings to light this remarkable quirk in U.S. tax law:

The Cold War ended more than 20 years ago, but the battle against global communism rages on — at least in the pages of the Internal Revenue Code.

Lawmakers… forgot to repeal a provision of the tax law exempting employees of Communist organizations from having to pay Social Security taxes on their wages. (They are similarly forbidden from collecting Social Security benefits derived from those wages, since wages and benefits are linked for all of us.)

When enacted, the Social Security provision was intended to be a punishment; lawmakers didn’t think people trying to overthrow the government should be able to participate in that same government’s premier social program. In fact, the provision was prompted by press reports that jailed Communists were happily collecting Social Security checks while sitting in their cells.

But today, it’s hard not to wonder if young Communists might not actually welcome their banishment from Social Security. As tax lawyer Libin Zhang has pointed out:

What was a penalty in might be a blessing today. Younger employees nowadays might prefer to forgo paying Social Security Tax and give up on the fragile likelihood of receiving Social Security checks in their retirement.

Of course, young Reds might have a hard time using this tax break since… the tax law depends on a cross-reference for its definition of a “Communist-action organization, a Communist-front organization, or a Communist-infiltrated organization.” The reference is meaningless, since no one is keeping lists of those organizations anymore (at least not officially).

You never know, of course. As Zhang suggests, “An employer could voluntarily send in a registration form and see how it goes.” But if they’re going to give it a shot, they better move fast. In a sign that lawmakers are finally catching up with current events, the congressional Joint Committee on Taxation has identified both the charity disallowance and the Social Security exemption as examples of “potential deadwood” lurking in the code.

Zhang’s blog post reprints the applicable part of the Internal Revenue Code that releases from social security tax any payments for…

…service in the employ of any organization which is performed (A) in any year during any part of which such organization is registered, or there is in effect a final order of the Subversive Activities Control Board requiring such organization to register, under the Internal Security Act of , as amended, as a Communist-action organization, a Communist-front organization, or a Communist-infiltrated organization, and (B) after .

Alas, Zhang says, “[t]he mandatory registration requirements of the Internal Security Act of were repealed in after some court cases found them to be unconstitutional [and] the Subversive Activities Control Board was abolished in .” So there is probably no final order “in effect” requiring any organizations to register under the exempting act.