Oldest Special Interest Group Wins Deduction
May 5, 2006
Another special interest group has won a tax deduction for its constituents. Prostitutes in Australia can now deduct the cost of certain items that are synonymous with their profession. From Fox News:
Tax officials in Australia today issued a list of “tools of the trade” sex workers can deduct on their taxes.
Among other things, the list issued on the Internet includes adult toys, lingerie, condoms, gels and oils. But prostitutes, strippers and lap dancers can’t claim fitness classes that keep them in shape. They can, however, claim the cost of dance lessons.
A spokeswoman says it’s “just another one of” the occupational lists the Australian Taxation Office puts together to help people.
The best tax code is one that allows for the fewest deductions thereby preserving as large a base as possible. See the Tax Foundation’s tenets of sound taxation here. Generally deductions make the code more complicated and are targeted towards powerful special interest groups.
However, business expenses are reasonable and justifiable deductions in an income tax system. In fact, consumption that aids in the production of income is one of the few supportable deductions.
If a businessperson can deduct the cost of the tools of their trade, then neutrality and fairness hold that prostitutes are equally entitled to deduct their business costs.