Wednesday, June 12, 2013

The Tax Implications Of The X-Men Being Human Or Not Human

The X-Men are not human.  The courts have said so. 

Why would the courts care?

To enjoy this particular situation, one must be aware of the following:

1) Politicians are elected by selling exemptions to the tax code.  Sometimes these exemptions are in the form of exceptions to tariff and quota rules.  Sometimes a rule is put in place to punish a competitor.  

2) This is why our tax code is four million words long, and growing by the day.    

3) Efficiency is good.  Inefficiency is bad.  If all merchandise came into the United States at the same tax/tariff rate, we could eliminate tens of thousands of government jobs and the godawful pensions that go with them. 

4) These wasteful "jobs" will never be eliminated.  There will always be an organized groups for exemptions in their medical device / green energy / children with cooties / American flag / Bibles For The Troops / javelin / coffin handle / Scrabble tile-manufacturing industries.  These groups are more organized than you.  They'll get their exemption, and you'll be taxed to supply enough bureaucrats, lawyers and courts to keep the rules sorted out. 

Now that my preliminary throat-clearing is out of the way, here goes:  
 Toy Biz v. United States was a 2003 decision in the United States Court of International Trade that determined that for purposes of tariffs, Toy Biz's action figures were toys, not dolls, because they represented "nonhuman creatures." This decision effectively reduced the tariff rate by a factor of two.

U.S. law distinguishes between two types of action figures for determining tariffs: dolls, which are defined to include human figures, and toys, which include "nonhuman creatures". Because duties on dolls were higher than on toys, Marvel Comics subsidiary Toy Biz argued before the U.S. Court of International Trade, that their action figures (including the X-Men and Fantastic Four) represented "nonhuman creatures" and were subject to the lower tariff rates for toys instead of the higher ones for dolls. On January 3, 2003, after examining more than 60 action figures, Judge Judith Barzilay ruled in their favor, granting Toy Biz reimbursement for import taxes on previous toys.

To summarize, the taxes on imported (human) dolls are lower than the taxes on imported (non-human) toys.  There's no reason for this distinction, and it would take a dozen Library Of Congress employees to figure out which politician put the distinction in place.  The donor he did it for is probably long-dead. 

It took almost ten years and hundreds of thousands (if not millions) of dollars in expenses to make this toy vs. doll distinction.

Here's just part of one logic behind one of the official rulings.  Go here for the whole thing.  If you can read this without praying for a nuclear strike on D.C., you're not part of the 49% who pay taxes.  
It is Customs position that the intent of the committees in reaching this conclusion is to deny the doll classification to those figures which possess non-human characteristics that are immediately apparent to the casual observer. Where the non-human feature(s) can only be discovered by close examination, the doll classification may be appropriate. The phrase "close examination" may encompass the need to look closely, the need to remove the clothes of the figure, or perhaps even the need of the observer to guess as to whether a feature that appears to be non-human is, in actuality, such a feature. Most angels and devils possess readily apparent non-human features, i.e., halos, large wings, visible horns, pointed tails, etc. -6-

However, if a figure is marketed as an angel or devil, and yet appears human to the casual observer, then, again, the doll classification may be appropriate.

In HRLs 081201 and 089895, issued October 3, 1988 and November 4, 1991, respectively, we classified certain troll figures that were described, in pertinent part, as being pot- bellied, flesh-colored, erect-standing figures, having flat heads with virtually no foreheads, pointed ears, and large, upturned snouts. We noted the guidance provided by the EN, that dolls should "represent" human beings, and cited Webster's Third New International Dictionary (1961), which defines "represent" as meaning "to portray by pictorial, plastic, or musical art: delineate, serve as the counterpart or image of: typify." In each case, we held that, while certain troll figures may have "resembled" human beings to some extent, it was immediately apparent to the casual observer that the subject figures did not "represent" humans, but rather represented widely recognized non-human creatures, i.e., trolls.

In HRL 085855, issued August 9, 1990, this office affirmed the doll classification of a "Beetlejuice" figure, which represented the ghost character from a popular movie and television show. The doll featured characteristics claimed to be non-human, but which could only be discovered by close examination. We stated that "[i]n order not to be classified as dolls, figures representing...other creatures, must possess appendages and features which immediately, at first glance, identify them as non-human."

Looking to the figures that have been classified as dolls in this case, we note that in most instances, the patent distortions essentially consist of such features as odd skin color, intricate headgear, capes which bear resemblance to wings, weaponry that is uniquely attached to, but is not an integral part of, the body, etc. As noted above, when a figure's non-human features can only be discovered by close examination, the doll classification may be appropriate.
Come quickly, Lord Jesus.  Come quickly. 

This brings us to the related case of Kamar Int’l v. United States, 10 C.I.T. 658 (Ct. Int’l Trade 1986).
That case dealt with whether E.T. the Extraterrestrial dolls represented an “animate” object, which would result in a lower tax rate than for toys in general (the customs classifications have changed a lot over the years, apparently). The Court of International Trade agreed with the plaintiff, despite the United States’ arguments that E.T. was a fictional alien and thus not an animate object. The Court cited as precedent the classification of Star Wars toys as toy figures of animate objects because “as depicted in the movie Star Wars they are living beings endowed with animal life.” Kamar, 10 C.I.T. at 661.
I don't believe that the E.T. case should have been argued as Dolls vs. Toys. 
Dolls vs. some other type of toy woulda been the appropriate discussion. 


Stephen M. Smith said...

US Customs has succeeded where Magneto failed, crushing Professor X's dream of a day in which mutants and humans would be treated the same.

ΛΕΟΝΙΔΑΣ said...

Yes. A nuclear strike is appropriate.

The Whited Sepulchre said...

And in the event of a nuclear strike, the X-Men would probably survive. Because they're not human. The courts have said so.

Marvel Price Variants said...

One of your finest articles - of course the X-Men are non-humans, that is the whole point. I would have made the decision for you and Uncle Sam for only half of the money spent.