{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"Tax and Taxonomy (ep. 188)","description":"(Get Surfshark VPN at https:\/\/surfshark.deals\/MOXIE - Enter promo code MOXIE for 83% off and 3 extra months free!) T-shirt for Ukraine, all proceeds and matching donation to Ukraine Red Cross at yourbrainonfacts.com\/merch Who you gonna believe -- me or your lying eyes?  Today we look at court cases where people try to avoid taxes by arguing that things aren't the things that they clearly are. 00:50 Tomato 08:18 Jaffa Cakes 17:48 Hydrox vs Oreo 37:40 X-Men Links to all the research resources are on the website. Hang out with your fellow Brainiacs.  Reach out and touch Moxie on Facebook, Twitter,  or Instagram.  Become a patron of the podcast arts! Patreon or Ko-Fi.  Or buy the book and a shirt. Music: Kevin MacLeod,  Want to start a podcast or need a better podcast host?  Get up to TWO months hosting for free from Libsyn with coupon code "moxie."   We like labels, as humans we like labeling things.  Taxonomy is the branch of science concerned with classification and there used to be several inconsistent and sometimes conflicting systems of classification in use.  Then came Carl Linneaus and his influential \u201cSystema Naturae\u201d in 1735, laying down the system we use to this day.  Linnaeus was the first taxonomist to list humans as a primate, though he did classify whales as fish. Years later, a New York court agreed with him.  My name\u2019s\u2026 D&D Stats Explained With Tomatoes Strength is being able to crush a tomato. Dexterity is being able to dodge a tomato. Constitution is being able to eat a bad tomato. Intelligence is knowing a tomato is a fruit. Wisdom is knowing not to put a tomato in a fruit salad. Charisma is being able to sell a tomato based fruit salad.   TOMATOES So that\u2019s more clear, but it raises a rather mad \u2013and for some, maddening\u2013 question: Is the tomato a fruit or a vegetable?  Well, yes, it\u2019s both, but actually no.  Botanically, it\u2019s a fruit. But legally, it\u2019s not.  A fruit is technically the seed-bearing structure of a plant whereas a vegetable can be virtually any part of the plant we eat.     Things must have been slow in March of 1893, because this definition was set by the Supreme Court.  The issue at hand was tariffs, specifically a 10% tariff on the import of vegetables into the United States.  Just veggies.  Imported fruits were not.  This was of particular interest to John Nix of Manhattan.  He ran a produce wholesale business along with his four sons and found himself the proud owner of an enormous tax bill on a shipment of Caribbean tomatoes.  John Nix & Co. were one of the largest sellers of produce in New York City at the time, and one of the first companies to bring the Empire state produce from such far-flung places as Florida and Bermuda.  Nix disputed the tax on the grounds that tomatoes were scientifically-supportably fruit.  Full of seeds, ain\u2019t they?  That\u2019s the part that seems to turn grown adults into fussy toddlers when their burger has a tomato despite their very clear instructions.  Worse than the anti-pickle crowd.  Anyway, Nix filed a suit against Edward L. Hedden, Collector of the Port of New York, to get back the tax money he\u2019d been forced to pay under protest.    The crux of Nix\u2019s case was the opening of an uninspired speech -  counsel read the definitions of the words "fruit," "vegetables," and tomato from Webster's Dictionary, Worcester's Dictionary, and the Imperial Dictionary.  Judgment for the plaintiff, case closed!  But wait, there\u2019s more.  Not to be outdone, defendant's counsel then read into evidence the Webster\u2019s definitions of the words pea, eggplant, cucumber, squash, and pepper.  Oh, it\u2019s on now! Countering this, the plaintiff then read in the definitions of potato, turnip, parsnip, cauliflower, cabbage, carrot and bean.  That\u2019s when, I assume, all hell broke loose in the courtroom and perhaps a giant musical number broke out.  Just trying to jazz it up a bit.  Nix\u2019s side called two witnesses, not botanists or linguists, but men with a lot of years in the fruit & veg business, to say whether these words had "any special meaning in trade or commerce, different from those read."   The supreme court decided to look more practically and less pedantically at the situation and ruled that it\u2019s how a tomato is used that makes it a vegetable, not the official scientific definition.  If people cook and eat them like vegetables, then vegetables they must be, and so they were subject to the tariff.  \u201cBotanically speaking, tomatoes are the fruit of a vine, just as are cucumbers, squashes, beans, and peas,\u201d wrote Justice Horace Gray in his 1893 opinion. \u201cBut in the common language of the people, whether sellers or consumers of provisions, all these are vegetables.\u201d     What was really important about Nix\u2019s case was the timing.  We\u2019re talking late Victorian, after the age of sail had been obviated by the steam power of the industrial revolution.  You might have heard about it, it was in all the papers.  Ships could now cross the Atlantic in 1-2 weeks, rather than the 6-12 weeks it took in a century prior.  Foods from the tropics could now reach New England in a week or less, making their import a viable option.  This was when bananas went from being expensive oddity to must-have trend to staple of every grocery store, though that was the Gros Michelle banana, the one our fake banana flavor is based on, not the Cavendish banana we eat today, but that\u2019s a topic for another show.  To service the evolving tastes of urban population, a new class of national wholesalers, such as the Nixes, were born.   The tomato\u2019s identity crisis was far from settled, though.  In 1937, the League of Nations, precursor to the UN, sought to classify various goods for the purpose of tariffs and they too labeled tomatoes a veggie, putting them under the heading of \u201cvegetables \/ edible plants \/ roots and tubers.\u201d  Not to be left out, the U.S. Department of Agriculture agreed, citing 1890s Nix v. Hedden case.    But there are always exceptions, hold-outs, outliers, and just plain contrarians.  Tennessee and Ohio made the tomato their state fruit.  If you think that\u2019s silly, you might want to swallow your coffee before I tell you the state vegetable of Oklahoma is the watermelon.  I did not care to look into their reasoning.  The European Union went a step further with a directive in December 2001 classifying tomatoes as fruit \u2014 along with rhubarb, carrots, sweet potatoes, cucumbers, pumpkins and melons.  It\u2019s bad enough all prepackaged fruit bowls have some form of melon in them (which causes me instantaneous reverse peristalsis), but it you gave me a fruit salad and it had cucumbers in it, I have a parking lot and I\u2019ll fight you in it.   But I think I\u2019ll give the last word to George Ball of the Burpee\u2019s seed and plant company: \u201cAre [tomatoes] fruits? Of course,\u201d he said. \u201cAre they vegetables? You bet.\u201d  Though Burpee\u2019s does put \u201cvegetable\u201d on the seed packet, so maybe it\u2019s not settled after all. JAFFA CAKES Maybe things that grow are too ephemeral for man\u2019s taxonomy.  Things are a lot of simpler when we\u2019re talking about man-made goods, things that don\u2019t grow on trees, and it is only a tragedy that you can\u2019t plant an entire orchard of Jaffa cake trees.  For those whose life has not yet contained this job, a Jaffa cake it a little round of dense yellow cake \u2013sponge, as they say in the home counties\u2013 with a disc of orange jelly on top enrobed in chocolate.  It.  Is.  So. Good.  You can sometimes find them in big grocery stores like Kroger and Publix if they have a large enough \u201cInternational\u201d aisle stock Branston pickle along with pad thai sauce and Tajin.   This issue here it again taxes, but this time VAT.  For those that don\u2019t speak British, VAT or  Value-Added Tax is \u201cA type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale.\u201d  Basically sales tax cranked to 11.  VAT is a tax that is paid by everyone involved with the manufacture of a given object or foodstuff, as well as the consumer.  As I go to air, the VAT rate in the UK is 20%.  If you\u2019re a UK-based widget-maker, you pay VAT on the price of the raw materials.  When you sell the widgets wholesale to a store, the retailer pays VAT on that sale.  Then, when someone comes into the shop to buy one of your cutting-edge widgets, they pay VAT too.       As with most areas of life, there are exceptions \u2013  a number of things are subjected to a reduced 5% rate and some things are exempt altogether.  The exceptions are for the really necessary things, like mobility aids, menstrual hygiene products, stamps, end of life care, and most food, including cake.  That\u2019s some grade A foreshadowing right there.  But some foods are just so wonderful, they absolutely must be taxed and taxed fully.  Such luxury items include alcohol, mineral water, confectioneries and, with the specificity that all governments seem to love, chocolate-covered biscuits.  Regular biscuits are apparently basic essentials.  No, American listeners, not like buttermilk biscuits, because even I\u2019d have to think twice about covering one of those in chocolate.  Whereupon I would do it.  I could make that work.  You\u2019re talking to the chick that made a startling good roasted garlic and parmesan ice cream.  No, British biscuits are cookies.  And British listeners, don\u2019t at me on soc meds with the definition of biscuit, because you know you\u2019re not consistent with it.  The only word that\u2019s more confusing is pudding.  Is that a dessert course, a sausage made of 80% blood, a flambeed Christmas dessert, or a suet dough stuffed with beef and veggies and steamed for eight hours?  While I\u2019m on British language, Cockney rhyming slang has got to be the worst thing\u2026   The McVities company had a notion otherwise.  They appealed, prompting a Customs and Exchange VAT tribunal.  Jaffa cakes, they said, shouldn\u2019t be taxed at the \u201cmost food\u201d 20% rate, but at the 5% rate of chocolate-covered biscuits.  It takes a lot of brass to make that claim when you yourself named the product Jaffa *cakes. [tiktok] origin story] According to the website for Her Majesty\u2019s Revenue and Customs, the court first had to establish a legal definition of what made a cake a cake and what makes a biscuit a biscuit, before determining which column Jaffa Cakes belonged in.  Jaffa Cakes were assessed using the following criteria: The product name, ingredients, texture, structure of the product, the size, how the product is sold, and how the product is marketed.   Towards this end, the main arguments on behalf of the office of Customs and Excise were that Jaffa Cakes are the approximate size and shape of biscuits, are stocked on the shelves with the biscuits, and, owing in no small part to McVities\u2019 own marketing, people eat them in the sort of contexts biscuit are eaten.    McVities countered by stating that Jaffa Cakes are baked in the manner of cake and of the same base ingredients.  Their master stroke was staleness \u2013 cakes go hard as they stale and biscuits go soft.  When Jaffa cakes go stale, and it\u2019s hard to imagine them sitting there long enough, they go hard.  McVities actually let a bunch of them out to go stale and brouhght them into court as evidence.  And in a legal tactic I\u2019d like to see more often, McVities baked a big ol\u2019 12-inch version of a Jaffa Cake, to show that if you blew it up to the size of a normal cake, it would just be a cake.    If I were on the other side of it, I might make a big deal over the name, but the judge presiding over the case, Mr D.C Potter, ruled that to be of \u201cno serious relevance\u201d because a product\u2019s name often has little to do with its actual function.  In the end, the court decided the Jaffa Cake was, in fact, a cake, and the Irish Revenue Commissioners agreed, though their ruling was based on the Jaffa Cakes\u2019 moisture content being greater than 12%.  So no VAT on Jaffa cakes, which means we can buy more of them, hooray!   HYDROX VS OREO In 1882, the entrepreneur Jacob Loose bought a biscuit and candy company that would eventually be known as Sunshine Biscuits, the company that would eventually give us Cheez-its, which my ex-husband went through at least a box of a week, dipping in port wine cheese spread.  About as close as he ever got to a balanced diet.  In 1908, launched the cream-filled chocolate sandwich biscuit known as Hydrox.  The name, he thought, would be reminiscent of sparkling sunlight and evoked an impression of cleanliness (probably because it sounds like a disinfectant).  This was after all only a few years after the Pure Food and Drug Act, before which your canned veggies might be full of borax and your milk be a watered down concoction of chalk dust and cow brains, and you wouldn\u2019t know.  Some tellings have it that Hydrox is a portmanteau of hydrogen and oxygen, the elements that make up water, the gold standard of purity.  Meanings aside, the fact that there actually was a Hydrox Chemical Company in business at the time, one that sold hydrogen peroxide and was caught up in a trademark lawsuit at the time over the use of the word \u201chydrox,\u201d should have given them a hint to maybe go back to committee.  Hydrox chemicals lawsuit, btw, pointed out that the word \u201chydrox\u201d was already in use for such disparate things as coolers, soda, and ice cream, so maybe Jacob Loose figured the word is out there, might as well use it.   For four years, Hydrox cookies with their lovely embossed flower design made cash registers ring for Sunshine Biscuits.  Then, 90 years almost to the day of this episode dropping, the National Biscuit Company came along \u2013you probably know them by their shortened name, Nabisco\u2013 with the launch of three different cookies, the Mother Goose biscuit, the Veronese biscuit, both now lost to history, and the Oreo.  The cookies were very similar, with Oreos even being embossed by the same time of production machine, but Hydrox have a sweeter filling and less-sweet cookie.  Like VHS vs beta, which you can learn more about in the book and audiobook, the newcomer soon came to dominate the landscape, and there\u2019s no clear reason why.  Any chocolate sandwich biscuit is offhandedly called an Oreo, no matter how cheap a replica it may be.  It\u2019s literally the best-selling cookie in the world now, with $3.28 billion in sales in the U.S. alone.  They sell 92 million cookies per day throughout 100-plus countries under the parent brand Mondelez International.  That ubiquity has led a lot of people to erroneously assume that Oreo is the original and Hydrox is the Mr. Pibb to their Dr. Pepper.  Hydrox did manage to hold onto a cadre of die-hards, especially in areas with significant Jewish populations, because Hydrox were always kosher.  Oreo cream used to be made with lard from pigs and Nabisco would later have to invest a lot of resources into replacing the lard with shortening in the 90\u2019s.     Sunshine Biscuits was purchased by Keebler in 1996, who replaced Hydrox with a reformulated product called "Droxies," which 100% sounds like drug slang for a veterinary tranquilizer.  Keebler was acquired by Kellogg's in 2001, and Kellogg's yanked Droxies from the shelves before adding a similar chocolate sandwich cookie to the Famous Amos brand, then discontinued them.  In August 2008, on the cookie's 100th anniversary, Kellogg's resumed distribution of Hydrox under the Sunshine label, a limited distribution, one and done.  Hydrox-heads besieged Kellogg's with phone calls and an online petition, asking that Hydrox be brought back for good, but all for naught.  Less than a year later Kellogg's had removed Hydrox from their website.  \u201cThis is a dark time in cookie history,\u201d one Hydrox partisan, Gary Nadeau, wrote, according to the Wall Street Journal. \u201cAnd for those of you who say, \u2018Get over it, it\u2019s only a cookie,\u2018 you have not lived until you have tasted a Hydrox.\u201d  As of the time of writing, I\u2019ve never had one myself, but I\u2019ll see if I can\u2019t lay my hands on some before going to air.   Getting my hands on some may be a touch trickier than it should be.  They exist; that\u2019s not the issue.  In 2015, entrepreneur Ellia Kassoff, a lover of Hydrox who knew the trick to getting a trademark someone else had allowed to lapse, was able to pick up Hydrox for his own company, Leaf Brands\u2014itself a dormant brand that Kassoff had revived.  Hip to the time, Leaf Brands made Hydrox available on Amazon, so anyone anywhere could get them whenever they wanted (plus two days for delivery).  These new Hydrox weren\u2019t going to bow gracefully to the dominant Oreo.  Their website points out that they use real cane sugar instead of high-fructose corn syrup, and no hydrogenated oils, artificial flavors, and GMOs, and warn consumers, "don't eat a knock-off!"  Hydrox are also made in the USA while Mondelez International was laying off U.S. workers.  Sales of Hydrox grew by 2,406 percent from 2016 to 2017, amassing more than $492,000 in sales \u2014 clearly, still light-years away from Oreo's overwhelming dominance in the market, but impressive progress nonetheless.   If you ask Leaf Brands, they\u2019d be doing a lot better if not for Mondelez \u2013 not out-competing them, deliberately sabotaging them.  This is the hard-to-find bit I alluded to.  In August 2018, Leaf Brands filed a lawsuit against Mondelez International, seeking $800 million in damages because of "lost sales and reputation.\u201d  The charges claimed that Mondelez was using its massive industry muscle "to place their own products in favorable locations in stores and move competitors in less desirable positions on store shelves."  On their Facebook page, you can see pictures of grocery stores where Hydrox cookies are hidden behind other displays, scooted to the back of shelves, and even turned sideways so the short end is facing out.  If you\u2019ve never worked grocery retail, your instinct may be to blame the store staff, but a lot of brands are actually stocked by the manufacturer.  Ever pass a guy in a Pepsi polo shirt with hand-truck loaded with soda?  That, but with cookies.  And it\u2019s not just their own products.  Mondelez is what\u2019s called a \u201ccategory captain,\u201d meaning they get to determine much of the layout for the whole cookie aisle.  Leaf alleges that Mondelez employees and agents are deliberately making Hydrox harder to find while making Oreos pert near impossible to miss.   This is far from the first lawsuit over Oreos.  A class action lawsuit was filed claiming the cookies misled buyers by stating that the product contains real cocoa.  The judge dismissed the case.  And they were sued for Fudge Covered Mint Oreos not containing any actual fudge.  The plaintiffs claim that these cookies don't contain any milkfat from dairy, a key component of fudge, but rather cheaper palm and palm kernel oil.  As so often happens, there are eleventy-hundred articles from the week the case was filed and nothing on the outcome.  That\u2019s what happened with the main point of this article.  I was dead sure I remembered Hydrox and Oreo going to court over the basic infringement question, and Hydrox losing, but I couldn\u2019t turn up anything on that because of the sabotage lawsuit sucking up all the search results.   X-MEN It\u2019s not all foodie fact fun today.  I\u2019m going to risk a copyright strike to play 15 seconds of a song that will make everyone near me in age go \u201caw yeah!\u201d [sfx Xmen theme]  For the young or those who had social lives in high school, that\u2019s the theme song to the 90\u2019s Xmen cartoon, and it slaps, as they kids used to say.  For the truly uninitiated, and c\u2019mon even my mom knows who the Xmen are, the story centers on a group of superheroes who get their powers from genetic mutations\u2026and government experiments, time travel, by dint of being aliens \u2013 it\u2019s a comic book, what do you want.   Ever since their introduction to the Marvel Universe in 1963, the X-Men have always had to deal with questions about their humanity.  While their enemies will stop at nothing to cast them as monsters, the team continues to fight for a world where they are treated just like humans.  That\u2019s in-universe.  In the broader reality, it\u2019s actually in the X-Men\u2019s best interest not to be considered humans.  Well, Marvel comics financial bottom line, anyway, and they went to court over it.   In 1993, international trade lawyers Sherry Singer and Indie Singh found an interesting provision in a book of federal tariff classifications \u2013 \u201cdolls\u201d are taxed at 12% on import while \u201ctoys\u201d are only taxed 6.8%.  The devil is in the details, or in this case, the definition.  A \u201ctoy\u201d can be any shape, representing any thing, but a "doll" can only be a representation of a human being, like Barbie or GI Joe.  [tik tok Joe\u2019s thumbnail]  Singer and Singh knew this distinction could be a sizable financial benefit for their client, Marvel Entertainment, who had an ownership stake in ToyBiz at the time.  For years, Marvel had been importing action figures that were taxed as dolls, despite their wide panoply of brightly colored characters often being anything but human.  Taking a direct approach, the two lawyers gathered up a literal bag full of action figures and went to the U.S. Customs and Border Protection headquarters in Washington, D.C. to try and convince them that Marvel wasn't importing humanlike \u201cdolls,\u201d but instead very non-human \u201ctoys.\u201d   The Customs staff\u2019s reaction to the bag of toys is not recorded, but their official response was that the \u201cnon-human characteristics\u201d of the X-Men and other action figures \u201cfall far short of transforming [these figures] into something other than the human beings which they represent.\u201d  Singer and Singh were locked onto this tactic and pursued it for a decade.  A judge considered various figures from Marvel\u2019s whole line to decide whether or not individual characters were human or not.  Rippling pecs, long claws, blue skin, red eyes, all were scrutinized, as lawyers on both sides expostulated on the philosophical ramifications of what it means to be human.  How can these action figures be human if they have "tentacles, claws, wings, or robotic limbs?"     I\u2019d loved to have been there to hear people with expensive educations in tailored suits, stand before a learned jurist in a wood-paneled courtroom and say things like,  "The figure of 'Kingpin' resembles a man in a suit carrying a staff. Nothing in the storyline indicates that Kingpin possesses superhuman powers.  Yet, Kingpin is known to have exceedingly great strength (however 'naturally' achieved) and the figure itself has a large and stout body with a disproportionately small head and disproportionately large hands. Even though 'dolls' can be caricatures of human beings, the court is of the opinion that the freakishness of the figure\u2019s appearance coupled with the fabled 'Spider-Man' storyline to which it belongs does not warrant a finding that the figure represents a human being."   In 2003, Judge Judith Barzilay ruled that Marvel characters aren't quite human enough to taxed as dolls.  \u201cThey are more than (or different than) humans. These fabulous characters use their extraordinary and unnatural physical and psychic powers on the side of either good or evil. The figures\u2019 shapes and features, as well as their costumes and accessories, are designed to communicate such powers."   Yay, a victory for the giant multimillion dollar corporation!  But a slap in the face for diehard X-Men fans.  Chuck Austen, one of the writers for Uncanny X-Men at the time, said his whole goal in the story was to show the team's humanity.  The nerds grew restless and Marvel had to issue a statement that read, "Don't fret, Marvel fans, our heroes are living, breathing human beings\u2014but humans who have extraordinary abilities ... A decision that the X-Men figures indeed do have 'nonhuman' characteristics further proves our characters have special, out-of-this world powers." And that\u2019s\u2026 To protect the public from contaminated oil, New York State law required that all fish oil be gauged, inspected and branded, with a penalty of $25 per barrel on those who failed to comply.  Samuel Judd purchased three barrels of whale oil that had not been inspected, and James Maurice, a fish oil inspector, sought to collect the penalty from him.  Judd pleaded that the barrels contained whale oil, not fish oil, and so were not subject to the fish oil legislation. At trial, one side said the term "fish oil" was commonly understood to include whale oil, and the other side plead the obvious science that whales are mammals.  The jury deliberated for 15 minutes and returned a verdict in favor of the fish oil inspector.    Mr. Judd, dissatisfied with the verdict, moved for a new trial. By then, the Legislature was in session and the Recorder, knowing that a new fish oil bill was pending, delayed his decision on the motion. The new enactment limited the inspection to fish liver oil, and the Recorder took the view that this implicitly confirmed that the earlier legislation covered whale oil. Accordingly, he refused to grant Judd\u2019s motion for a new trial.   James Maurice resigned his position as fish oil inspector because he considered that the position under the new law had too little value or importance.     Sources: https:\/\/www.constantpodcast.com\/episodes\/are-whales-fish https:\/\/www.npr.org\/sections\/money\/2013\/12\/26\/256586055\/when-the-supreme-court-decided-tomatoes-were-vegetables https:\/\/www.washingtonpost.com\/news\/wonk\/wp\/2017\/10\/18\/the-obscure-supreme-court-case-that-decided-tomatoes-are-vegetables\/ https:\/\/www.insider.com\/interesting-facts-about-oreo-2018-7#oreo-first-appeared-on-the-market-in-1912-1 https:\/\/www.mashed.com\/223360\/the-strange-history-of-the-oreo-and-hydrox-cookie-rivalry\/ https:\/\/www.mashed.com\/702384\/why-this-snack-food-giant-is-being-sued-over-an-oreo-flavor\/?utm_campaign=clip http:\/\/www.todayifoundout.com\/index.php\/2015\/10\/time-company-baked-giant-cake-win-court-case\/  https:\/\/www.edinburghnews.scotsman.com\/read-this\/is-a-jaffa-cake-a-cake-or-a-biscuit-heres-the-definitive-answer-as-decided-by-a-court-1379222 https:\/\/www.mentalfloss.com\/article\/92007\/why-us-federal-court-ruled-marvels-x-men-arent-humans https:\/\/www.polygon.com\/comics\/2019\/9\/12\/20862474\/x-men-series-toys-human-legal-issue-marvel-comics https:\/\/observer.com\/2007\/12\/thar-she-blows-19thcentury-court-case-harpoons-a-whale-of-a-story\/ https:\/\/en.wikipedia.org\/wiki\/Nix_v._Hedden https:\/\/www.youtube.com\/watch?v=FtpJFEBcKoE ","author_name":"Your Brain on Facts","author_url":"http:\/\/yourbrainonfacts.com","html":"