Wisconsin Legislator Proposes Tax on Video Games

December 27, 2007

Every time you turn around, some ridiculous tax policy is being proposed in Wisconsin. Whether it’s Governor Doyle’s proposed tax on oil companies, Governor Doyle’s proposed tax on hospitals, a proposal to tax soft drinks put forth by some legislators, a gigantic payroll tax hike to pay for universal healthcare within the state that would basically double the state’s tax burden, or the state’s continuous support of tax credits for specific industries and companies, the state is a bastion of bad tax policy. (It actually makes you appreciate the federal tax system.)

Now one state senator is proposing a special tax on video games to fund the juvenile detention system in the state. Here’s the story from DailyTech:

This week, Wisconsin state Senator Jon Erpenbach proposed a bill that would add an additional tax on video games and gaming equipment, like consoles and accessories.

The new tax would levy a 1% surcharge on the sale of video games and related equipment, with funds applied towards the cost of moving non-violent, delinquent 17-year-olds into the juvenile detention system, as they are currently treated, prosecuted, and incarcerated as adults.

According to Erpenbach, the tax has nothing to do with dissuading gamers or casting videogames in an undesirable light; rather the idea is that the tax is “a kind of kids-kids thing,” with gamers helping out fellow youth stuck behind bars in an adult prison system.

Despite the fact that the bill’s emphasis is on moving non-violent youth offenders into the juvenile court system, gamers have latched onto the tax as an unfair attack on their hobby. Justin Sallows, an adult Wisconsin gamer speaking to WISC-TV, thinks that the tax is “a real problem … even if that’s not what the intention is, it creates the impression that there’s something wrong with the video games because we need to put some extra tax on there to try to dissuade people from playing them.”

Erpenbach’s logic is this: kids should have to pay a tax on video games to help out other kids their age that engage in bad behavior. There are many problems with this logic. First, the move that Erpenbach is suggesting within the juvenile detention system would benefit everyone in the state, not just children who play video games. His ridiculous “kids-kids logic” could be extended to every program that sends government funds to children. Maybe a video game tax and a tax on other products that children disproportionately buy should pay for public schools too.

But even if one buys the “kid-kids” argument, there are many more industries where young people buy products at a disproportionately higher rate than others. Why not put taxes on certain types of music, clothes, or entertainment? Or why not go directly at the source and put a special tax within the income tax system on people who work at ages 16 or 17, or raise the drivers license fees on people those ages? This may sound stupid and discriminatory, but that’s exactly what this proposal is.

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