Editor’s Viewpoint: Add vice for tax relief
Americans’ vices are a favorite piñata to whack at when governments are scrambling to find money to close budget gaps. For example, President Obama just signed a bill that adds 61 cents to the existing 39-cent federal tax levied on every pack of cigarettes. Even though that increase brings their total cigarette tax to $2.42, smoking Texans can breath a little easier knowing that at least New Yorkers will be paying about $10 a pack because of the city’s sales tax.
And, in the last place you’d expect an attempt to increase taxes on alcohol and cigarettes, Kentucky legislators are pushing for a 6 percent alcohol sales tax and doubling the tariff on cigarettes, chaw and snuff. The state is facing a $456 million budget shortfall, and the proposed taxes are estimated to generate $150 million dollars. Some of the state’s bourbon distillers aren’t taking this lying down, though. They took a page from their Boston kinfolk who threw a little tea party, and emptied nine bottles of whiskey on the state’s capitol steps.
But, two tax controversies are brewing that add a different twist to the discussion on how to offset budget deficits: one of them involves private gyms and the other brothels. In a move that could raise funds but discourage healthy lifestyles, New York Gov. David Paterson wants to add a 4 percent tax on health club fees and services. Fitness industry opponents to the measure support the 18 percent tax the governor also has proposed for sugary sodas, saying that unlike their business, obesity is unhealthy and adds a financial burden to the state. The state’s Deputy Health & Human Services Secretary openly admits that his office supports the tax on health clubs for the sake of raising revenues, and notes that private gyms aren’t the only places people can exercise.
As the brawn versus blubber battle continues in New York, a unique answer to closing the budget gap is unfolding in Nevada. There, Sen. Bob Coffin says the state should allow prostitution in all its cities, and if taxed, could raise $200 million a year and help to close its current $2 billion budget shortfall. To reinforce the economic importance of their profession to the state, many brothel owners agree. Currently, prostitution is legal in all counties except the two largest, but the state’s only cut is $100 for a business license fee. Las Vegas Mayor Oscar Goodman, who believes the time has come to add prostitution to Sin City’s goodie bag, has proposed Amsterdam-style bordellos that would provide a stimulus for its drooping downtown economy.
Because opinions about prostitution, cigarettes and alcohol are washed in emotions, let’s not lose sight of the real issue, which is taxation. We’ve already agreed that we can legally sin in those ways, so let’s agree to tax them. But if we want an option to raise even more money, then let’s take out personal sin insurance on our politicians. Now, there’s a gamble with a guaranteed payout.