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Archive for Saturday, February 28, 2009

‘Skin taxes’ can tempt, but face 1st Amendment issues

February 28, 2009

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— It’s enough to make you blush: Some politicians want a bigger taste of 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 cash-strapped 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 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 haven’t stopped trying to capitalize on the fact that sex sells, especially when facing big budget shortfalls and weary voters who aren’t 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.”

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 gauge.

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