Tuesday, November 3, 2009

Tax is a dirty word

Well it's official - the state of Pennsylvania LOVES to tax its residents. One type of resident, however, seems to pay more than others. That resident is one who participates in 'sins,' like drinking (Allegheny County has a special drink tax to fund public transportation) smoking (currently about $2.45 per pack in PA) and gambling. MAdditional legislation is being proposed in Pittsburgh to tax gambling profits more so that the city can balance the books.

One sin flies under the radar, however, and it's actually worth examining - pornography.

It certainly makes one stop and ask why, doesn't it? After all, we're more than happy to tax smokers until they are literally blue in the face, and taxing adult beverages hasn't hurt profits or the number of drinks ordered. Doesn't it stand to reason that our society's appetite for pornography would remain consistent even with additional taxes?

Come to think of it, doesn't it make sense that the adult entertainers might actually be required to pay a portion of their hourly rate and claim 'tip' income, similar to my favorite waitress at Susie Q's?

While I'm no proponent of paying taxes, this industry has gotten a free pass too long and instead of burdening industries that are already paying more than their fair share, like bars and restaurants, shouldn't another industry shoulder some responsibility? Particularly when that industry likely serves alcohol and allows smoking?

So why don't our legislators touch this proposal with a ten foot pole (pun intended?) Only Senator Jane Orie, a Republican from McCandless, has attempted to tackle the debate so far, and she is getting no traction whatsoever.

As a free market thinker, it seems to me that our legislators are sending a clear signal that rather than stimulate the economy with tax paying businesses like restaurants, casinos, service companies, etc., they are suggesting it makes better business sense to get into the pornography industry. After all, it's basically a tax free business that has proven to be recession-proof. What kind of message is this? The industry is likely responsible for as many marital conflicts as drinking problems, gambling problems, etc., so if that's the hurdle to be classified a 'sin,' pornography definitely fits the bill.

It's got to be more than that. Perhaps our legislators have friends that run in these circles and contribute to not only their personal campaigns, but their personal entertainment as well. Who knows.

In any case, this is actually one tax I'd support completely, as it would actually legitimize the business, its participants and those who enter the darkened-doors.

2 comments:

Hudson Business Service said...

I never thought about it! I love my occasional glass of wine, so of course I fuss if taxes increase on alcohol, but I still buy it. My son smokes – and no, he does not like the increase taxes on cigarettes, but he still smokes and pays the price. So why not tax pornography? Do we simply not think about, since it is an industry many of us tend to ignore? You know – out of sight, out of mind. Do we try to pretend it is not a part of our economy? If we are going to enact “sin” taxes, let’s pick on an industry that hasn’t had there share of tax increases. I am with you on this!

Anonymous said...

Professor,
You make an excellent point. What government official would opening argue against taxing this sordid industry. Isn't that what we call in the sales industry "picking the low hanging fruit?"
Shipley, Reston, VA