Struggling State Governments See
Dollar Signs With New Sin Taxes
In 2007, Texas began requiring strip club patrons to pony up a $5 entrance fee state tax to see nude dancers. Texas state lawmakers predicted the tax would raise more than $44 million for programs that would benefit rape victims, while others decried tying the strip club industry to sex crimes. The so-called “pole tax” has raised $13.6 Million for the state so far.
Texas lawmakers claimed they were not trying to demonize the industry or legislate morality. But critics have accused the state of hypocrisy. On one hand, state officials claim to be concerned about crimes associated with alcohol and live nudity, such as exposure of sexual organs / lewd or lascivious conduct , solicitation for prostitution, or disorderly conduct . But on the other, they remain willing to overlook the very thing they condemn if imposing a tax on it means adding to the bottom line.
Critics of the tax have argued that the law was truly motivated by the state's desire to make easy money. In a time when no politician wants to be associated with raising taxes, it's easy to see why targeting businesses like strip clubs seems like a good idea. Demand would likely remain strong, and any cash-strapped state could receive a sudden influx of cash with little protest from voters.
Targeting adult businesses to raise cash in tough times is nothing new. Proponents argue that the strip club tax would just be taking “sin taxes” beyond the realm of alcohol or tobacco. In the past five years, lawmakers from California to Kansas have suggested special taxes on pornography, escort services, exotic dance clubs and other adult businesses. A U.S. senator even brought up the idea of a federal tax on Internet porn.
The Texas Entertainment Association has now brought the "pole tax" fight to the Texas Supreme Court arguing that the tax on strip clubs amounts to an unconstitutional restriction of free speech. Lawyers and legislators across the country will be watching to see if the “pole tax” survives the scrutiny of the Texas court as Florida and other states consider imposing similar taxes to resolve budget short falls.
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