Pole Taxes Not “Genius”

by Bubbles on July 2, 2012 · 16 comments

in Politics, Strippers

Last August, the Texas Supreme Court upheld the “pole tax,” otherwise known as the Sexually Oriented Business Fee, a $5-per-patron tax on strip club customers, and in January, the U.S. Supreme Court declined to hear the case, letting the law stand. Collected at the door along with the cover charge, the tax is intended to fund sexual assault prevention programs and health insurance for low-income residents. In the year since, the Illinois legislature passed a similar bill, intended to fund rape crisis centers, which is now awaiting the governor’s signature. There’s also one on the table in California that would, you guessed it, fund “sexual assault treatment and prevention.”

Now the Houston City Council has passed its own pole tax, an additional $5-per-patron tax to fund the processing of rape kits. It was this instance that caught the eye of Jezebel’s Dodai Stewart, who proclaimed it “genius.”  It’s not entirely clear if she was being serious or sarcastic when she wrote “Pretty smart to use money from folks who enjoy sexualized women to aid sexually assaulted women.” What, exactly, does that mean? That sexuality, sex work, and sexual assault are simply different points on the same curve of behavior? That a man who pays to look at strippers is somehow also responsible for the rape of another woman? How gross does this tax feel for strippers in Houston who have been raped?

Connecting funding for victims of sexual assault to strip clubs is the primary reason I don’t like these taxes. It is absolutely offensive to have the government tell us that we—or, rather, our customers—are responsible for rape and domestic violence, and that we should be taxed specifically for that purpose. I’m aware that to call a tax “offensive” isn’t a strong argument, though, so let me also point out that it is yet another regressive tax, which are even more offensive to me. While strip clubs are certainly a luxury expense, taxes at the point of purchase always impact middle-to-low income people disproportionately. There is also no guarantee that the taxes will be collected from patrons since the tax is on the clubs, not the customers. This means there’s a good chance that the fees dancers pay to work will go up to cover the club’s tax bill. Perhaps the state of Texas and the city of Houston should look into an income tax on some of their super wealthy residents to improve their bottom line, instead of shifting the tax burden to the point of purchase. The state sales tax is 6.25% and rises to 8.25% with local additions in many municipalities which, while not the worst in the nation is still a burden that falls disproportionately on the poor and working class.

Tracy Clark-Flory wrote about the latest round of state pole taxes at Salon, and spoke with anthropologist Judith Lynne Hanna. Hanna recently published Naked Truth: Strip Clubs, Democracy, and a Christian Right (T&S review coming soon!) which takes the faulty “secondary effects” studies that blames strip clubs for increasing crime and breaks it down for the propaganda it is. I wrote about the myth of secondary effects here after the Texas Supreme Court’s decision came down, and it’s good they’re being exposed for the shoddy research they are. But while debunked fake statistics are what the Texas Supreme Court based its opinion on, the bigger legal issue is that they declared that the pole tax didn’t violate First Amendment rights by taxing a specific business for a specific purpose. Should they decide to tax, say, fast food to fund diabetes treatment or bars for victims of drunk drivers, they’d have legal precedent to do so. More taxes like this are certainly in the works as states scramble to deal with budget deficits.

{ 10 comments… read them below or add one }

Maggie McNeill July 2, 2012 at 1:25 pm

I totally agree with your opposition to “pole taxes”, but disagree with your statement that they aren’t genius; as you point out, they establish a precedent for all sorts of new taxes, yet do so in a way that fanatics, moralists and silly people will approve of. Sneaking legal precedents by the credulous is an act of Trojan Horse-like wiles; it’s evil genius, but genius nonetheless.

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Bubbles Bubbles July 2, 2012 at 1:46 pm

That’s fair! I was mostly responding to the term as used by Dodai Stewart, who clearly thought it was the good kind of genius. Though to refer to anything accomplished by the Texas Legislature as “genius,” evil or otherwise, is a questionable stance. As Kat said when we visited the Capitol last week, it’s a Bad Idea Think Tank.

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Jen July 2, 2012 at 2:08 pm

That’s a great analysis — I actually want to send it to the professor who taught my tax policy class. There’s a pretty well-established list of criteria that policy-makers should consider when establishing a tax system. You hit on a few of them, but it’s issues like adequacy, stability, efficiency, progressivity, etc. It’s true that sales tax is extremely regressive (in this case, it’s a tax on services rendered rather than goods, but it’s basically the same thing.)
Here’s the deal with the pole tax: It’s couched in terms of something that’s often called benefit equity — basically, that concept that the same people who pay the tax are those who benefit. Or in this case, those who cause the problems are the ones who pay for it. That’s the idea behind the gas tax funding interstates, and so on. But you’re completely correct to point out that their connection between strip clubs and sexual assault is bogus. As a sexual assault survivor myself, I find that so offensive.
Really, what it boils down to is the same old argument for any kind of sin or vice tax. In general, taxes are supposed to be efficient, in the economic sense of the word — they’re supposed to change consumer behavior as little as possible. The idea in classical economics is that the free market gets it right almost all of the time, and except in case of positive or negative externalities (pollution bad, public education good), any messing with the market price will cause harmful distortions. But in the case of sin taxes, the tax is specifically aimed at changing consumer behavior. IMO, it’s also a moralistic tool aimed at punishing consumers.
So basically, you have free market-loving lawmakers who are pretending to go up to bat for benefit equity, but really they’re using taxation as a tool to punish or alter consumer behavior. Which, ironically, is guaranteed to get conservative knickers in a twist on any other issue. Hypocritical, really.
Another important point to consider is that these lawmakers don’t value women’s health in general, and they certainly don’t put a high value on caring for sexual assault survivors. Remember Sarah Palin saying rape survivors should pay for their own rape kit? If they did care about rape survivors, they wouldn’t be funding SANE exams in such an ad hoc way.
Honestly, I liked this tax a lot better when they were proposing it to fund public education…

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Bubbles Bubbles July 2, 2012 at 2:55 pm

I can’t tell you how happy I am to have a student from the LBJ School of Pubic Affairs comment on this post. Thank you, Jen.

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SyraBrian July 2, 2012 at 4:10 pm

Pole taxes are a lousy way to raise money. The folks doing the revenue-enhancement projections always fail to realize that the presence of the tax will limit the behavior on which they’re projecting their revenue predictions.

Because of this, any real revenue will most likely come up short of the projected revenue.

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Matthew Jude Brown July 2, 2012 at 9:14 pm

I’m not sure they see it that way, though — while in public they’ll of course say they hope the tax reduces the “sinful” behavior, in private they are taxing urges that don’t go away easily no matter how punitive the tax regime, and imposing those taxes on people they think (often correctly) the public isn’t going to feel sorry for.

I betcha the “pole tax” effectively is taken out of strippers’ tips, too. They’re not taking extra money out of the customer’s hands, they’re transferring some more of the money the customers are willing to pay into government hands.

It’s also not really going to the causes they say it’s going to, because the government already pays for those things. It simply frees up other money to go elsewhere; I suspect the supposed good causes these taxes are supposed to fund don’t actually end up with any more government money than they did previously.

If they do, it’s because whoever’s running the system in question has political pull and is getting their quid pro quo.

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perlhaqr July 3, 2012 at 12:41 am

One does wonder how offended the people who support this tax would be by a “$5 per order tax” going to subsidese diabetes care at all the fast food restaurants in town.

And if you think that’s impossible, clearly you haven’t heard any news out of NYC in the last month. :/

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Kelly July 7, 2012 at 10:37 am

I read about this in my local paper ages ago – and all I thought was “Good, it’ll keep the cheapskates out – I can’t stand a lousey tipper!”

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Ian July 8, 2012 at 3:55 pm

Late to this, but part of the problem with “sin taxes” is that there’s nothing stopping lawmakers from altering what the tax specifically funds down the road. As an example, cigarette taxes have gone from funding anti-smoking/public health campaigns to becoming a stopgap in state budgets, meaning smokers are being forced to pay a disproportional share for basic services compared to other groups. Even if lawmakers keep their word (right…), Matthew Jude Brown nailed it on the head – these taxes oftentimes just free up money to go elsewhere. Absent of the law requiring certain funding benchmarks, it means government entities can use the money elsewhere, meaning it no longer benefits the original program as their money stays the same. All of this is on a service that to an extent has inelastic demand.

It’s a political poison pill at its worst: not only do people who oppose this seem like they’re “pro-strip club” – a heavily stigmatized label – but that they’re against the funding of rape kits. My question however is this: do “pole taxes” only apply to straight clubs, or do gay clubs have to pony up too?

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Just Me November 25, 2012 at 3:11 am

Dancers, if you do declare for taxes, you can now declare a little less, since they’re getting it at the door anyway. If you don’t declare for taxes, congratulations, this means you are no longer in the 47% that Mitt Romney talks shit about.

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