Yesterday was the five-year anniversary of #TheDress, one
of the most fascinating and confounding Internet memes of the past decade. At
the time, I saw a remarkable parallel to an international tax policy issue , and considered writing a blog post comparing the two. I wrote it out,
but decided not to submit it to my editors—and I’ve regretted it ever since.
Here it is, with minimal edits and an update at the end.
March 1, 2015
Unless you spent this weekend away from your computer, your
TV, and your phone, you probably heard about “The Dress”—or as it became known
on social media, #TheDress.
The garment, pictured above, seemed ordinary enough, until people started to
describe it. Some people said it was gold and white, others said it was black
and blue, and neither group could figure out what in the world the other was
talking about. Tens of millions
of people on every continent spent Thursday night arguing about it, and it
lasted throughout the weekend.
(I can’t see anything other than gold and white. Believe me,
I tried.)
The answer, it turns out, wasn’t some social delusion,
sorcery, or a mass outbreak of color-blindness. It didn’t even really have to
do with eyesight or color. Experts
suspect it is due to slight variations in neurology creating differences in
how people interpreted the images, color, and light in the picture lead to very
different conclusions about what was being depicted.
There’s a similar dynamic which sometimes occurs when
governments look at complex corporate tax structures. Due to differences in
laws and customs—often slight—tax authorities can come to quite different
conclusions about what a structure is, and how it should be taxed. And while
#TheDress just resulted in a few moments of amusing online diversion, when it
comes to international taxation this phenomenon can cause a serious problem.
