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Stupid Tax Ideas from Busybody State Legislators

2 min readBy: Gerald Prante

George Washington University taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. law professor David Brunori (also Tax Analysts columnist) has written a column this week in State Tax Notes that makes us at the Tax Foundation realize that somebody else out there is as fed up as we are at the “asinine” tax proposals that come from many state lawmakers (and members of Congress). Here’s an excerpt of one of the best tax commentaries we’ve seen in quite some time:

Incredibly Ridiculous Idea of the Week

The proposals from lawmakers are getting so outrageous that they warrant creating of a category beyond ridiculous. Here’s one: Florida Rep. Rick Kriseman (D) wants to impose an excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. on strip club admissions and use the money for low-income nursing homes. I kid you not. As we have seen in Texas and Pennsylvania, strip club taxation is all the rage. The funny thing is that Kriseman originally wanted to extend the sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. to strip clubs until he discovered that they were already subject to sales tax. He then opted for the excise tax. That’s the kind of well-thought-out fiscal policy we’ve come to love.

Excise taxes are supposed to be used to compensate society for the external costs of using a particular product or service. I guess Kriseman is saying that one of the externalities of girlie bars (as the old-timers used to call them in Pennsylvania) is higher nursing home costs. That’s an interesting conclusion. Maybe people who visit strip clubs live longer.

At least other strip club taxes were earmarked for something in the general subject matter (sex offenders). But here’s my question for Kriseman and the next legislator who comes up with a knucklehead idea like that: Aren’t nursing homes important enough that we don’t have to come up with a ridiculous tax to fund them? Aren’t they important enough to appropriate money for and, if necessary, to raise real taxes for? If not, I’m not sure they are important enough to pick on grownups who want to watch naked people dance.

To read the complete column, click here (subscription required). Also for more Brunori, listen to this Tax Policy Podcast he did with the Tax Foundation in 2006. And here’s some other Brunori material on the TF website:

Brunori: Killing Property Tax Deadly to Local Power

David Brunori: We Need a 21st-Century Tax System

Why Liberals and Conservatives Should Reject Blagojevich Tax Plan

Sales Tax Holidays: Politically Expedient but Poor Tax Policy

Broadening the Debate over State Corporate Tax Harmonization

Beating Back the Home Mortgage Interest Deduction

Here’s a list of Brunori’s books published through the Urban Institute, including his most recent Local Tax Policy: A Federalist’s Perspective.