States Seek Revenues Through Taxing Booze and Porn

When the economy goes in the tank and economic illiterates in legislatures need to balance budgets, the first thing they think of is not cutting spending, but how to raise revenues on people without them realizing it or on hitting groups that have no real organized method of opposing the tax plans.

In New York, they're contemplating taxing online porn. The AP notes:

The state Division of Budget confirmed to The Associated Press that the tax would apply to skin flicks, whether they are downloaded online or purchased through pay-per-view on television.

``By taxing it you're legitimizing it,'' said Michael Long, chairman of New York's Conservative Party. ``You're sending a message to the children, you're sending a message to the teenagers, if you're taxing it _ how can it be wrong? I don't know how you can sink much deeper.''

And because of recent court decisions over the relatively new area of taxing Internet transactions, the sales tax would apply only to pornographers who are located in the state. It's a break for out-of-state Web sites that wouldn't have to collect from New Yorkers.

Governor David Paterson has already tried to broach the subject of imposing taxes on carbonated beverages before being reproached by people who couldn't warm up to that subject. The porn tax probably wont generate much in the way of income, but it shows the desperation of governments to raise revenues without angering all taxpayers.

In Oregon, they're looking to tax booze.

Lawmakers are considering a bill that would raise taxes on beer. The current excise tax is about $2.60 and the new bill would raise it to $49.61 for a barrel of beer.

There are two kegs in a barrel of beer, so the new tax would be almost $25 per keg -- which works out to around 20 cents per pint in a 128-pint half-barrel keg.

Money generated would create the Alcohol Impact Remediation fund, which would distribute funds to various agencies that address treatment and recovery programs.

Oregon is far from alone in looking to the sin taxes for revenues. Many other states are looking to raise taxes on alcoholic beverages, including loosening restrictions that would enable sales on more days and/or raising the tax rates.

Every year, you see legislatures around the country look to obscure taxes and those taxes that aren't paid all the time - like real estate transfer taxes - for additional revenues. This year is going to be especially difficult given the economic situation, but that's not going to deter these states from increasing spending over last year.

Even the federal government has gotten into the sin tax game; they're hoping to fund the massive expansion of the S-CHIP program with a huge increase in cigarette taxes. Seeing how cigarette tax revenues haven't exactly matched projections, it's likely to come up short and all taxpayers will be left holding that bag too.