Proposed PA tax on adult businesses

Pittsburgh Tribune-Review story on the latest new tax proposal, this one on “adult businesses” from Senator Jane Orie (so much for Senate Republicans opposing any new taxes). I was intereviewed for the story, but didn’t make the cut. Basically my comments fell into two criticisms:

1) State government should not try to use the tax code to manipulate personal decisions.
2) Taxes on narrow segments of the economy encourage loopholes and evasion. For instance, there is already some question as to how to define “adult businesses”

The owner of two 18-and-older boutiques that sell lingerie, adult novelties and pornography said it would be unfair to tax her businesses but not a gas station selling pornography or a department store that sells vibrating “personal massagers.”

Evasion of such taxes will lead to an underground economy – witness the black market for cigarettes, speakeasies during prohibition, or even recent illegal gambling in Philadelphia. If safety, security, and crime are the chief policy concerns, then the state should look favorably on well lit, well advertised, successful, widely-acknowledged “adult entertainment” venues, rather than driving customers to secret strip clubs and porn shops run out of basements.

Finally, I am not sure how she intends to crack down on Internet porn. Pornography and the Internet go together like peanut butter and jelly, and Internet porn is driving adult bookstores and video stores out of business, even without a new tax. She could propose taxing just PA-based Internet porn sites, of course, which is just silly given the global interconnectivity of the web.