Facing a $1.3 billion shortage in the next year’s state budget—the largest gap in Oklahoma’s history—the Oklahoma legislature wrapped up its regular session last week with the passage of a $6.8 billion budget. The budget...
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- How About a Tax on Sex?
How About a Tax on Sex?
We've all heard that cigarettes are bad for us and for society as a whole and should therefore be taxed. Many people also believe that certain sexual behavior is bad for individuals and society, so why not tax it as well? Stephen Dubner, co-author of Freakonomics, provides us with a satirical "Immodest Proposal" for taxing sexual activity. My favorite part of the proposal was this, because it would be all too true if such a sex tax were actually imposed:
Let it be clear that the aim of said tax is not to deter sexual activity itself, but rather to capture some of the costs imposed by certain extraneous sexual activity that, especially once made public, tends to divert precious resources from more worthy subjects; to this end:
- Married couples will receive a substantial credit for sanctioned, in-home sexual activity; and, conversely:
- The highest rates shall be paid for premarital, extramarital, and otherwise unusual or undesirable sexual activity; and:
- Sexual activity between members of the same gender; or activity between more than two participants; or in an airplane, on a beach, or in other "nontraditional" settings shall surely be taxed at a higher, though heretofore undetermined, rate. Also to be determined is a scale for noncoital activity.
What would optimal tax theory say? Beyond the Pigouvian reasons Dubner cites, actually, optimal tax theory would argue that sex should be taxed just like any other consumptive good under a world of perfect information. The problem stems from the fact that it cannot be easily measured and administered.
Ask yourself this: if prostitution were legal, shouldn't it be subject to a consumption tax? The answer is obviously yes. But while this may sound geeky, what about those who don't pay for sex? Isn't there imputed income being earned there, just as the Bureau of Economic Analysis treats owner-occupied housing? Both services increase utility.
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