Would "Porn Tax" Solve Budget Woes?

Politicians Pushing To Tax Dirty Magazines, Strip Clubs But Might Violate First Amendment

(AP)  Politicians in cash-strapped states want to strip revenue from the economy's naughty side, pushing for special taxes on dirty magazines, racy movies, sex toys and strip clubs.

In Washington state, a half-dozen legislators recently endorsed a huge sales tax increase on explicit movies, magazines and other sex-themed products.

New York officials recently acknowledged that Gov. David Paterson's proposed “iPod tax” on Internet downloads also would apply to online porn purchases, along with tamer diversions such as pop music and computer software.

And in Texas, state lawyers are fighting to preserve the “pole tax,” a $5 cover charge on strip clubs that's being challenged by business owners.

In the past five years, lawmakers from Tennessee to Kansas to California have pitched special taxes on porn, escort services, exotic dance clubs and other adult businesses. A U.S. senator even toyed with the idea of an Internet porn tax on the federal level.

Most of the proposals - call them skin taxes - have stalled, often because of conflicts with First Amendment constitutional protections of free expression. Washington's proposed porn tax earned little support, despite the need to close an $8 billion budget deficit.

But even with serious constitutional problems, lawmakers have not stopped trying to capitalize on the fact that sex sells, especially when facing big budget shortfalls and weary voters who are not likely to stomach an across-the-board tax hike.

“Why do they do it? Because they can,” said Phyllis Heppenstall of Peekay Inc., which operates adult stores in Washington and California. “It makes them look good to their constituents. Or at least they think it does.”

It's easy to see why targeting sex businesses seems like a good move politically. Singling out taboo behavior for extra taxation is part of the political drive that has led to “sin” taxes on tobacco and alcohol.

And in the U.S., where public attitudes toward sex are more buttoned-up than in Europe and elsewhere, few are likely to stand up and defend porn or nude dancing against additional taxes.

On purely economic grounds, a pornography tax is a decent idea because consumer demand would probably remain strong, University of Texas economist Daniel Hamermesh said. Some believe adult entertainment to be a multibillion dollar industry, although the size is difficult to gage.

“In that sense, it's not a bad way to raise money,” Hamermesh said. “You're not going to discourage people. But if you want to raise money, why not?”

But sex-themed taxes have still attracted opposition. Even some social conservatives have resisted, arguing that the government legitimizes naughty behavior by profiting from it.

Adult businesses, of course, also have pushed back. Their trump card has been the First Amendment, which protects entertainment products from taxes based solely on their content.

Some restrictions on adult entertainment are generally allowed, such as zoning laws that regulate where a strip club can operate. That's because such laws are aimed at secondary factors, such as a business' effect on surrounding property values, UCLA law professor Eugene Volokh said.

But tying a tax strictly to a product's content is different, Volokh said - you can't tax Playboy, for instance, unless you also hit other magazines like Newsweek and National Geographic.

Officials in Texas have run into that problem with the state's “pole tax,” the special entry fee for strip clubs that serve alcohol.

The Texas Legislature approved the fee in 2007, hoping to spend the money on sexual assault and health insurance programs, but a state judge tossed out the fee as an unconstitutional infringement on free speech. State lawyers have appealed the decision.

New York state could avoid free speech problems with Paterson's proposed tax on Internet downloads because it would treat all entertainment products the same, regardless of content.

Washington state's would-be porn tax sought an additional 18.5 percent sales tax on a wide range of “adult entertainment materials and services,” including “paraphernalia.”

The tax could have added about $20 to the $109 sale price of a top-selling “Gigi” vibrator at Babeland, an adult store in Seattle.

Analysts said the tax could have netted the state about $17.8 million for the upcoming two-year budget.

But after heavy criticism from editorialists and sex-shop customers alike, Democratic Rep. Mark Miloscia, who sponsored the bill, now acknowledges it will fail this year.

That's a relief for Babeland, which sells sex toys, DVDs, magazines and other erotica at stores in Seattle and New York City. A porn tax might have caused the company to reconsider doing business in the state, Chief Operating Officer Rebecca Denk said.

“The adult industry is this big mystery,” Denk said. “They think it's the Larry Flynts of the world and very deep pockets and a multibillion-dollar industry, when in fact it's small businesses.”

[miriambk]

More taxes will solve nothing. Spending needs to be brought under control.

[luke_4u]

Tax, tax, and more tax. When is enough, enough. It doesn't matter if it's on porn or poodles. There's too much damn tax as it is, it's time to chill out, with the constant taxing of "everything". The spending is what needs to be brought under control. How about the tax on food, they tax our very lifes sustenance, now how messed up is that ? Enough with the tax already ! Cut back on the spending, like I have to do, when I think I'm getting short on money.

[gce651]

Porn has been the one inductry that's consistently turned a profit, innovated in the VHS and DVD market, and pioneered Internet buisiness. It's been one consistently entrepreneurial endeavor.

Let's tax RELIGION!

[GODSnLIBERALS]

tax porn, put a $20 tax on top of the tax of those sex devices and such....

legalize and tax WEED BY 200% and if we need more money we tax it some more..tax all smoking devices..tax smoking papers $5.00 a pack..

those smoke shop..tax them and ask for PERMITS THAT COST TONS OF MONEY...

i am already liking where this is going...

[ianlou]

Here's an idea, Let Tax Golf Courses. Anyone who can still afford to play Golf can afford to pitch in a little more.

Lets Tax, big time, all gas that is pumped at a marina, anyone who owns a boat too big to pull up to the pumps on a boat trailer can afford to pay extra.

Lets Tax Broadway Shows for the same reasons as above...

Lets create taxes on all the things that are enjoyed by the affluent.

[miriambk]

Oops...I just burped. Perhaps we should tax that as well......

[toolmangler-2009]

Lets tax families that have kids, Living is the biggest single cause of death and debt. Spay and neuter all humans (says the Dog) and your problems will solve themselves it 50 years or so.

[ibzjem]

tax porn and tax religion...

just to be fair......
Posted by GODSnLIBERALS at 1:33 PM : Feb 27, 2009

Come to think of it... if we tax religious establishments, then we open the door for them to influence politics far more than they all ready do now.

[payasyougo]

What the voter needs is a 400% tax on under the table payments to politicians.

[endurorob]

tax porn and tax religion...

just to be fair......
Posted by GODSnLIBERALS at 1:33 PM : Feb 27, 2009


Or the churches anyway. While we are at it lets slap an extra tax on fast food to help cover the cost of health care. And how about an extra tax on alcahol to help pay for health care and alcaholic recovery programs.