California's Cartoon Tax: Not Funny/News Bites | Media | Chicago Reader

California's Cartoon Tax: Not Funny/News Bites 

Sign up for our newsletters Subscribe

Extremists invoke as holy writ the proposition that "the power to tax involves the power to destroy." Even reasonable people accosted by the tax man cite the 1819 warning of Chief Justice John Marshall as the wisdom of the ages.

"The whole thing is insane," says the reasonable Richard Newcombe. "They're trampling on free speech. They're trying to tax opinion." This dangerous hour finds Newcombe rising to oppose a dubious new tax offensive unleashed by the state of California. Newcombe likens it to the proverbial camel's big wet nose poked under the canvas. If it isn't swatted away, expect the whole rank beast inside the tent of American journalism.

Newcombe's president of Creators Syndicate, a Los Angeles-based agent for columnists such as Ann Landers, Dan Quayle, Robert Novak, Paul Harvey, and Stephen Chapman; editorial cartoonists such as Herblock, Mike Luckovich, and Doug Marlette, Pulitzer winners all; and comic-strip creators such as Mell Lazarus (Miss Peach, Momma), and Brant Parker and Johnny Hart (B.C., Wizard of Id). Leaving the columnists be, the state proposes to slap a sales tax on the cartoonists' product, which Newcombe insists violates the First Amendment.

"We tax plastic Jesuses," California tax man Gary Jugum told me jubilantly. He's not afraid of any First Amendment. "Crowns of thorns. Plastic crowns of thorns. We taxed Jimmy Swaggert's little pamphlets. He said it was a violation of freedom of religion. The Supreme Court said we could."

Jugum's an assistant chief counsel for California's Board of Equalization. I called him expecting an unctuous defense of confiscation. Instead I found a sportsman. In a nutshell, his position on taxing newspaper art is a jaunty what-the-hell-it's-worth-a-try. He laughed at the notion that the tax defies the Constitution (that's what got him on the subject of plastic Jesuses). But he volunteers that by other standards the tax is a little ridiculous.

The BOE did this: It stormed Creators and demanded sales records going back to the syndicate's founding in 1987. "There were threats of "We're going to close you down. You're dragging your feet,"' Creators' attorney Brian Oxman tells me. "It was rather belligerent. That's how taxing authorities are. They need their information. They rattle their sabers until they get it."

California's an economic basket case, and Newcombe thinks desperation could be driving the BOE. Or maybe it's just government getting back for years of ridicule. But Jugum believes the board's motives are benign. He supposes it was auditing some newspaper and came across, among the business expenses, the purchase of comics and cartoons. Bells rang. Here in California we tax the sale of artwork, the BOE told itself, and pounced on Creators as a test case.

Creators grudgingly turned over its records, which Oxman says could create "a million-dollar problem" in back taxes. But then the syndicate got busy. Newcombe and Oxman put together a prodigious document--a "declaration" of principles that is, among other things, an anthology from Herblock's 66-year career.

"The power to tax is the power to destroy," asserts the declaration, with none of Justice Marshall's pussyfooting. It censures the BOE's distinction between cartoons and columns as an "arbitrary and capricious effort to tax a disfavored form of political speech." Speech, not art, is what's at stake here, it contends, reminding the board that it was Herblock who coined the term "McCarthyism" and the enduring image of a shifty-eyed Richard Nixon who needs a shave.

These milestone cartoons--and many, many more by Herblock and other Creators-distributed cartoonists--were displayed in the teeming three-ring binder Creators turned over to the BOE. Newcombe's favorite exhibit is a page from the Los Angeles Times. The Times carried side by side a Luckovich cartoon chiding Connie Chung for her interview with Newt Gingrich's mom and an Edwin Yoder column of identical intent (though infinitely less visceral impact). By the BOE's lights, Luckovich's zinger was taxable; Yoder's treatise wasn't.

Oxman says, "When I presented this to the board they sat there speechless. Because they had no answer to how this is a rational decision."

What about it? I asked Jugum, who's of a profession skilled in the dark art of squaring circles.

"Well, I think the distinction--if it exists--is that we have always treated artwork as tangible personal property," he said. But a cartoon isn't simply artwork--so Creators' declaration argues with page after page of comic strips made meaningless because their dialogue bubbles have been whited out. Furthermore, even if a cartoon is art, a newspaper doesn't actually buy it; it buys the right to reproduce it once.

"That creates a more difficult legal assessment problem," Jugum admitted.

Yet a problem you think you've solved, I said.

"We're pretty aggressive out here," he said blithely. "And our position is it's taxable. The state board takes an action and sues somebody. That person argues before the board. They may prevail there. Even if we were to prevail internally, the individual has a right to go to court."

So hire yourself a lawyer and let the chips fall where they may.

But the next move is up to the BOE, which hasn't been heard from since it was handed Creators' declaration. Meanwhile Creators has been rounding up newspaper allies who sound less concerned about the First Amendment than about getting their pockets picked. Any new tax on Creators' materials would be passed on to its newspaper clients. What's worse, this sales tax is a two-sided coin. The other side's a use tax the BOE says it can levy on any illustrated material California newspapers buy from anybody anywhere.

Harold Fuson Jr., general counsel for the San Diego-based Copley papers, asked me Jugum's own opinion of the BOE's regulations. I said Jugum called them archaic and inconsistent. So what? said Fuson. "You could say there are many things about the whole structure of tax law in the U.S. that are archaic and inconsistent by definition. Just because it's archaic and inconsistent doesn't make it unenforceable."

This seems to be what Jugum's banking on. "We're applying ancient concepts in a new marketplace," he conceded. California created a sales tax in the 1930s, but then it gave newspapers a break. A regulation still on the books forbids the taxing of artwork transmitted to newspapers by "impressed mat." This was a sort of blotter-paper engraving that reigned in the era of the letterpress but disappeared a quarter-century ago. Now art is mailed to clients on camera-ready sheets of paper.

"That's their best argument," said Jugum. "Their best argument is that the regulation hasn't kept up with technology."

Actually, their best argument is even better than that. Not only is yesterday's technology untaxable, Jugum told me, tomorrow's is too: Artwork can't be taxed when it's shipped by modem or computer disk. "We say when something is transferred electronically there's no sale of tangible personal property," he told me. "The problem goes away."

Of course that's only under current law. If California is allowed to tax Herblock and Luckovich today it can change the law to keep taxing them when they're distributed by modem tomorrow. It can change the law even more and tax Landers, Novak, and Quayle.

And then every other state in the union that thinks What a great idea! can rub its hands and change its laws too.

"I do see it as the camel in the tent," said Newcombe.

Despite the camel, Rick Newcombe was in a wonderful mood when we spoke. In one hour Hillary Clinton was going to announce that she intended to write a weekly column and Creators Syndicate would distribute it.

"Eleanor Roosevelt wrote hers for 26 years," Newcombe reminded me. She began it in 1936 and kept it going until she died in 1962, long after her husband's own death in 1945.

If Bill Clinton isn't reelected will Hillary keep writing? I asked Newcombe.

"Absolutely," he said.

One of the Reader's owners came back from a Carleton College reunion last month and filled me in on a panel discussion fellow alum Howard Tyner took part in. I called Tyner. Did you really say, "The Tribune will never endorse a Democratic presidential candidate short of the Republican candidate being a convicted felon."

"I was going to say pederast," the Tribune's editor told me.

In America Republican papers are papers that endorse Republicans for high office. Democratic papers are papers that have been known to endorse a Democrat. I'm a little skeptical of predictability raised to a virtue, but Tyner defended his paper's constancy. "A newspaper has to have some core values," he said. "You can move around as the Tribune has over the years under that umbrella of core values, and certainly the Tribune today differs a whole lot from the Tribune of the 50s or 60s. But underlining the editorial values are some things that haven't changed, in terms of a free market, a deep distrust of politicians and Washington, and a sort of midwest pragmatism. Given that the Chicago Tribune played a crucial role in both the formation of the Republican Party and getting Abraham Lincoln in the White House, I think that's one of the things that will continue. The Republican presidential endorsement is one of those things I'd be very loath to fool around with."

I replied that the core values of the Republican Party of Abraham Lincoln may not be the core values of the Republican Party of today. "Well, I don't know," Tyner said. "It's safe to say that the Republican Party has endorsed the idea of a smaller, less activist federal government for a long time." (Not that that's what Lincoln had in mind when he went to war.) "The Tribune of Joseph Medill was a staunch supporter of abolition. I think the Tribune today is fairly progressive on race issues."

Art accompanying story in printed newspaper (not available in this archive): illustration/courtesy Creators Syndicate.

Tags: ,

Comments

Subscribe to this thread:

Add a comment

More by Michael Miner

Agenda Teaser

Performing Arts
Communion Den Theatre
September 20
Performing Arts
BigMouth Chicago Shakespeare Theater
September 18

Tabbed Event Search

Popular Stories