New Jersey is taking your gift cards(Read article summary)
A new law set to go into effect this year would allow the New Jersey Department of the Treasury to seize unused gift cards as "unclaimed property" after two years. The public outcry has been swift.
If you drive a car , Iâ€™ll tax the street.
If you try to sit , Iâ€™ll tax your seat.
If you get too cold , Iâ€™ll tax the heat.
If you take a walk , Iâ€™ll tax your feet.
. . .Â And if you donâ€™t use your gift cards within two years, Iâ€™llÂ seize them all.
(With apologies to the Beatles)
Pursuant to a law passed two years ago, the New Jersey Department of the Treasury will soonÂ compel sellers to obtain the ZIP code of every buyer of a gift card in order to enableÂ the stateÂ toÂ expropriate the value of the unused card as â€śunclaimed propertyâ€ťÂ after two years.Â Â The Â law also applies to unused travelersâ€™ checks and money ordersÂ in addition toÂ gift cards
InÂ 2011 Â the state seized $79 million of such â€śunclaimed propertyâ€ťÂ under the law.Â Â There was huge outcry and a lawsuit quickly followed that resulted in an injunction against the collection of ZIP codes.Â But this injunction has just been lifted, although the case has not yet been resolved.Â American Express has responded by pulling its gift cards from pharmacies, supermarkets and convenience stores.Â Two third-partyÂ providers ofÂ gift cards to malls, convenience stores and grocery stores,Â Blackhawk Network and InComm,Â have followedÂ Amexâ€™s lead and announced that they will stop doing business in New Jersey in June.Â Â The reason is that it is impossible to ensure compliance with the ZIP code mandate when the cards are sold by other parties.
Unlike gift cards issued by retailers, network-branded cards like American Express Â and Visa gift cards have no expiration date, require no fees after purchase, and are acceptable in exchange virtually everywhere.Â They operate asÂ what Mises would call â€śsecondary media of exchange.â€ťÂ Â People therefore are willing to hold them forÂ extended periods of time as (imperfect) substitutes for cash.Â Thus, based on the same reasoning, the state could declare that cash balancesâ€“in the form of currency and demand depositsâ€“that an individual accumulates over a two year period are also â€śunclaimed propertyâ€ť and subject to seizure.Â Â Â Sound far-fetched?Â Â Well think againâ€“the tax devouring politicians of New Jersey have already thought of that.Â The same law mandates that banks transfer to the state allÂ funds in New Jersey resident accounts that have been â€śinactiveâ€ť for more than two years.Â Of course you can appeal to the state to reclaim your â€śunclaimed propertyâ€ť but you must fill out a blizzard of forms and jump through bureaucratic hoops.Â Good luck with that.
But there isÂ occasionallyÂ Â a silver lining toÂ governmentâ€™s never-ending effort to mulct the taxpayers of more and more of their income and wealth.Â Â Sometimes a law is soÂ egregious and Â tyrannicalÂ that it Â causes the Â carefully fabricated curtain concealing the nature of governmentÂ to momentarily fly backÂ Â to revealÂ the greedy, money-grubbing little menÂ frantically operating the levers of power for their own benefit.Â Â Then,Â the legitimacy of the state suddenly and magnificently dissolves and the publicÂ perceivesÂ governmentÂ Â for what it is and always was:Â a band of thieves.Â Â Â This appears to be happening now in New Jersey, judging by the comments onÂ the latest money grab.Â Â Here is a small sample:
â€śThese criminals belong in jail.â€ť
â€śWow, you pay for a gift card, donâ€™t use it then NJ comes along and claims your money. Isnâ€™t that stealing?â€ť
â€śThis is insaneâ€¦ how can they possibly justify something like this?â€ť
â€śWhat is the matter if someone uses their gift card in 10 years or 6 months? It is their money (gift card).â€ť
â€śYet another example of New Jerseyâ€™s big government stealing $$$$$ whenever and wherever it can.â€ť