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Tax Prison Labor

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This is an interesting discussion of why we should tax prison labor. It seems a bit off to me–for me, the point of taxing prison labor would be to disincentivize prison labor. That’s not really quite where this conversation goes. But given the reality of the tractor sized loophole in the Thirteenth Amendment, a whole lot of American labor happens in prisons and there are all sorts of policies that impact this.

Joseph J. Thorndike: Just to challenge you a little bit on this, does it make sense to try to address all these different kinds of inmate labor? It seems pretty clear that when you’re hiring inmates out to private companies, that might deserve treatment that is akin to any kind of private sector labor. But does it make sense to try to be changing the treatment of inmate labor that is the variety of sweeping up inside the prison, are these really the same thing or are they apples and oranges?

Stephanie Hunter McMahon: Well, it’s all on a spectrum. It seems pretty clear to me that when there’s a private employer, all labor is the same and that someone’s putting forth the effort in producing a good or service.

At times, where prisons run their own industries and produce their own goods, which I would argue is much more similar to the private employer, it just happens to be that prison has become the producer. But even when you’re in the prison and someone’s providing a service that has to be provided, such as cafeteria work or janitorial staff, that work is work that would otherwise be paid to someone who would receive these benefits.I do agree there’s that potential. I’ve spoken with someone from the Prison Policy Initiative about how there’s some employment inside of prisons which is just make-work. I do agree that when it’s a job that’s created for nonproductive reasons, I think there’s going to need to be lines drawn. But if it’s productive labor, I think it should be treated the same.

Joseph J. Thorndike: It raises interesting questions about what kind of work counts as work, which is a much broader question that we historians certainly have engaged in over time and that the tax system has treated differently over time. Certain kinds of labor really are treated like labor and certain kinds of labor just aren’t.In general, what you’re saying is that prison labor isn’t really treated like labor ever, and that the vast majority of it, some large percentage of it should be treated like labor, is your point.

Stephanie Hunter McMahon: I think a very large percentage. The default should be that it is treated as labor, whereas since at least the 1950s, it’s all been excluded.

Joseph J. Thorndike: You can change a lot of this by changing the statutory exclusions, and then we run into the next part of the problem: A lot of these workers don’t make enough money to qualify for all of these programs based on what they’re earning. How do we fix that again?

Stephanie Hunter McMahon: That’s the difficult issue. There’s lobbyists in various states that are trying to eliminate what is seen, in my mind, justly as slave labor, when you’re requiring people to work and paying them nothing. In about five or six states, there’s no payment whatsoever, and other states are paying them pennies on the dollar or pennies per hour.

There’s the potential that the lobbyists will secure for inmate labor a minimum wage. If not, there’s the possibility of creating a different type of measure for labor that’s allowed to be less than minimum wage.There’s the one situation where there are members of religious orders who’ve taken vows of poverty. They don’t have to get paid because they’re not getting paid, but there’s an ability to value what they’ve done to allow them to earn towards Social Security.

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