April 30, 2003
Now that's an innovative revenue stream

Tom Spencer points to this article about doings in the Missouri Senate, which contains the following rather amazing proposal to add to the state's coffers:


After defeating the governor's plan, Republicans took up their own blueprint for raising additional revenue. The plan, which would raise an estimated $182 million, is a package of 39 separate proposals.

About two-thirds of the revenue would come from one-time sources, including several changes recommended by Gov. Bob Holden. Other provisions include:

[...]

Generating $5 million by imposing a 5 percent tax on adult entertainment. The tax would apply to sales of sexually explicit material and services, such as live nude performances and actual or simulated sex acts.

[...]

The adult entertainment tax would apply to fees for bestiality, masturbation and sadistic or masochistic abuse. Sen. Sarah Steelman, a Rolla Republican, distributed a proposed amendment to add lap dances to the services that would be taxed.


Does Rick Santorum know about this? Maybe the Daily Show was right about Santorum's real meaning!

I'm still boggling about "fees for bestiality, masturbation and sadistic or masochistic abuse". I'd hate to be the poor tax compliance officer for that. As for the tax on lap dances, I'm imagining a new strip club policy: Put $20 in the dancer's G-string for the lap dance, and 50 cents in the coin collecter for the Lap Dance Tax. Please try not to drop the coins in the G-strings.

All joking aside, one wonders if this isn't a sneaky way to try to regulate sexually oriented businesses (known around here as SOBs) out of business, especially given that another legislator is proposing a tax on "marijuana and other illegal drugs". You know how there's a line item for ill-gotten gains on 1040 forms, so the Feds can bust otherwise untouchable miscreants for tax evasion? This feels like that to me. Of course, if that's true and the intent is to force these places out of business, a large number of people would be thrown out of work, which would in turn depress state tax revenue. Gotta watch those unintended consequences.

One wonders if Our Fair City, which has its own revenue issues, might consider adopting such a tax instead of continuing its quixotic pursuit of tougher anti-SOB laws. If nothing else, debate over the issue would finally give me a reason to watch Council proceedings on the Municipal Channel.

Posted by Charles Kuffner on April 30, 2003 to National news | TrackBack
Comments

Texas already has a tax on illegal drugs, the Controlled Substances Tax (Texas Tax Code Chapter 159). The rules for collection are found in the Texas Administrative Code.

The tax stamps are quite popular with collectors, and Texas' stamp is particularly cool looking.

A 1994 Supreme Court case, however, found these taxes to be so high (about $100/ounce for marijuana in Texas) as to be punitive, and therefore prosecuting someone for possession as well constitutes double jeopardy. The state can choose to pursue the taxes or the drug case, but not both. All the issues are laid out in the Texas Attorney General's opinion on the situation.

Oddly, the state could possibly raise money and avoid double jeopardy by lowering the tax rate to a non-punitive level!

Posted by: Matt on April 30, 2003 9:56 AM

Whenever a locality or state needs to raise revenue, they always turn to "sin" taxes first. Normally, however, this means tobacco and beer, which is why you now need a second mortgage to buy a carton of cigarettes in NYC.

With this in mind, the following statements seem to take on a whole new meaning:

"Is that a roll of quarters in your pocket, or are you just happy to see me?"

"Which one gave you the quarter? All of them!"

"Hey buddy, you got a quarter so I can get something to eat?"

"The loosest slots in town!" (Ok, I had to try that one.)

Posted by: William Hughes on April 30, 2003 12:45 PM

Part of the reason for using this mechanism may be because (I'll speculate -- not 100% sure on this) they are "off ledger" when calculating the amount of taxation for Hancock Amendment purposes (MO puts a cap on the amount of taxes that can be collected from taxpayers, mandating a refund of any excess). Interesting.

Posted by: Kevin Whited on April 30, 2003 2:05 PM