Struggling States Look to Unorthodox Taxes

A February 28th Times article, “Struggling States Look to Unorthodox Taxes,” covered an interesting, unorthodox discussion of ideas to bridge state budget shortfalls. Items suggested by representatives to tax included marijuana, porn, brothels, and same-sex marriages. According to the article, two-thirds of states face a deficit, and the most common phrase you hear from states is “Everything is on the table.” What I find particularly interesting are the reactions that residents of these states are having to each proposal, since these first-hand quotes shed light on the current morals and beliefs of the society we live in.

For example, Representative Mark Miloscia from Washington suggested pornography as a new tax source—proposing a 18.5% sales tax on items like sex toys and adult magazines. He was shocked at the outraged feedback he received from this, especially since he had spent over 11 years implementing fees on property owners, alcohol and cigarettes with very little opposition. “People came down on me like a ton of bricks,” he said. “I didn’t quite understand. Apparently porn is right up there with Mom and apple pie.”

Miloscia also said he was accused of attacking the First Amendment and other “sacred institutions” with his pornography proposal. “I had people call up and say their marriage would fall apart,” he said. “I didn’t know how passionate people are about this stuff.” His proposal never made it past the committee level.

Another proposal in California is to legalize and tax marijuana, an enormous industry that is technically illegal. The article states that the legalization could raise nearly $1 billion a year via a fee charged to retailers, and an additional $400 million through sales tax on marijuana sold to buyers. A smoking age of 21 would also be implemented, placing the plant in a regulatory class similar to alcohol or tobacco. Clearly this proposal would have a large fan-base, and the regulatory and economic benefits seem appealing. Yet not everyone agrees with this argument either—a California lobbyist is quoted saying, “the last thing we need is yet another legal substance that is mind-altering.”

I personally believe that in this day and age, both of these proposals seem like a great way to generate revenue while increasing the regulation of both marijuana and the sales of pornography. What are your thoughts on both of these proposals? Considering the state of our economy, do you feel that people should accept these stereotypically “taboo” items as tax-worthy, or should their sales/regulation stay the way they are to avoid moral battles?

Article found at: http://www.nytimes.com/2009/03/01/us/01sin.html?scp=1&sq=struggling%20states&st=cse