Tax Roundup, 3/19/2013: How tax policy killed the big bands. Maybe Cyprus is next.

March 19th, 2013 by Joe Kristan

 20130319-1How the Taxman Cleared the Dance Floor – Thanks to a ‘cabaret tax,’ millions of Americans said goodbye to Swing Music. (Wall Street Journal)

In 1944, a new wartime “cabaret tax” went into effect, imposing a ruinous 30% (later merely a destructive 20%) excise on all receipts at any venue that served food or drink and allowed dancing. The name of the “cabaret tax” suggested the bite would be reserved for swanky boîtes such as the Stork Club, posh “roof gardens,” and other elegant venues catering to the rich.

But shortly after the tax was imposed, the Bureau of Internal Revenue offered this expansive definition of where it applied: “A roof garden or cabaret shall include any room in any hotel, restaurant, hall or other public place where music or dancing privileges or any other entertainment, except instrumental or mechanical music alone, is afforded the patrons in connection with the serving or selling of food, refreshments or merchandise.”

The tax hit not just swells, but anyone who liked to go out dancing—which in those days included just about everyone who went out at all.

Congressional stupid goes back a long time. I hope the new medical device excise tax doesn’t work out the same way.


TaxGrrrl, Cyprus Looks To Impose Bank Tax, Boost Corporate Taxes To Rescue Economy . Like how the cabaret tax rescued the big bands.

It was probably the same way with the cabaret tax. Internet Sales Tax Collections Falling Far Short of Experts’ Estimates (Joseph Henchman, Tax Policy Blog)



William Perez, Senate to Begin Tax Reform Hearings

Dang. Not Yet Time to Break Out the Champagne (Eric Toder, TaxVox)

Patrick Temple-West, Tax breaks versus spending, and more (Tax Break)

Martin Sullivan, Are Foreign Multinationals Paying Their Fair Share of U.S. Tax? (


TaxTrials, Tax Court: Horse Breeding Activity Not Motivated By Profit, Losses Disallowed

Peter Reilly, Wyoming Beats The On-line Companies On Room Tax

Missouri Tax Guy, Deducting Charitable Contributions. Don’t forget: if it’s over $250, no receipt from the recipient means no deduction.

Jack Townsend, HSBC India Depositor Sentenced


Closing shop. It looks as though long-running accounting blogger Dan Meyer is closing his store. Bummer.

Slightly better than being completely ignored, I suppose. Tax Nerds Feeling Vindicated After Their Long-held Viewpoints Are Paid Lip Service (Going Concern)


Kay Bell, Drones targeted for tax breaks in California. I think legislators have all the breaks they need already.

Tony Nitti, Fighter Nick Diaz Responds To Pummeling By Admitting That He’s Never Paid Taxes. Wait…What? Being smart may not be closely linked to making a living by getting beaten.

Now he’s in real trouble. Triple-murder suspect pleads guilty in tax fraud case. (


They were busy Beavers.

James Beavers and his wife, Beverly Beavers, are standing trial in U.S. District Court on charges they plotted to file false tax returns to garner $1 million in refunds.

Federal prosecutors say they tricked the IRS out of nearly $600,000 before the agency wised up to the scheme.