I just picked up a copy of the newest Economist today.
Apparently, the government of Texas needs funds to pay for the treatment of sexual harassment victims. Apparently, they want to get the money by taxing strip clubs, specifically by charging a $5 entry fee to its patrons.
The logic behind it? Strip clubs and sexual harassment both objectify women and violate their rights, thus it's a justifiable tax.
To me, it really does sound like a misplaced punitive tax. Taxation creates a disincentive for patrons due to the higher prices. Thus, imposing a tax on strip clubs makes it seem like the government is trying to dissuade patronage from these establishments. For no real reason whatsoever, I might add.
It's like imposing extra taxation on fancy restaurants to help fund soup kitchens because they both involve food.
As the tagline states, "a good cause, but a bad policy". Couldn't have put it better myself.
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3 comments:
"no real reason whatsoever" ?
Tsk... tsk...(waving my finger)
What? There's nothing wrong with strip clubs. Everything that goes on is mutually beneficial and mutually consensual. Age restrictions are in place to limit the exposure, while security and bouncers are also there to prevent any actual violations of the women's rights.
So there's no real reason to dissuade patronage, right?
Well, living two years in Amsterdam which have the largest and oldest red light district in western Europe do not make me sentimental on the strip club by it self.
Let's see it in a public economics point of view. We can assume the price elasticity of entrance fee to strip club with regard to customer is rather low. (no explanation required)
Thus, the $5 tax would not reduce many customer and would raise money that can be used for good cause.
Look for paper entitled "Optimal sin tax" by Rabin (UC Berkeley) & Donoghue(Cornell)
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