Calif. Lawmaker Proposes Taxing the Sex Industry

Adult movie shop i i

A California assemblyman has proposed a bill to tax the adult film industry, but he doesn't have enough support for it to pass. iStockphoto.com hide caption

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Adult movie shop

A California assemblyman has proposed a bill to tax the adult film industry, but he doesn't have enough support for it to pass.

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California's budget deficit is estimated at a whopping $15 billion, and one Democratic lawmaker thinks pornography could help close the gap.

Democratic Assemblyman Charles Calderon has proposed heavy taxes on the adult industry to bring millions of dollars to the state each year.

Under a bill he has introduced, every time someone in the state buys a porn film, they'll pay a 25 percent tax. The studio that produces the films would pay an additional 25 percent tax on their profits. Strip clubs and other forms of adult entertainment would also be taxed.

Kayden Kross, an up-and-coming porn star, says she doesn't understand why Calderon is picking on her industry.

"There's also just the principle of the thing," Kross says. "The fact that they're taxing us, our industry and not the entertainment industry as a whole, or something broader. They're really targeting us."

Calderon says it is just like taxing cigarettes or alcohol. He has no interest in driving the industry out of the state. As he sees it, this tax only makes sense, because the industry is a drain on government resources.

"We are not only the birthplace of pornography, we are the capital," Calderon says. "And I'm not moralizing about that. I don't care. It is what it is, and it's having an impact on society, and those impacts are generating costs to the state."

Revenues from the tax would go to a special fund to offset costs that result from adult entertainment. Calderon says those costs are wide ranging.

The costs are associated with "criminal activity surrounding adult entertainment venues like strip bars and arcades," he says. "The administration of justice, the control and treatment of sexually transmitted diseases, child protective services, public and education."

Calderon estimates the tax could raise as much as $600 million a year. The bill has support from the Los Angeles County Sheriff's Department and unions like the California Teachers Association.

But Matt Gray, a lobbyist fighting the tax, says there's no hard evidence adult entertainment is even costing the state money. He says this tax proposal comes at a bad time for California's more than $4 billion adult entertainment industry, because it is grappling with Internet piracy and increasing competition.

"There's no way that California could compete against the global market with an extra 25 percent tax or even an 8 or 10 percent tax," he says.

At the moment, the bill doesn't have enough support in the Legislature to make it to the governor's desk. But Calderon hopes the budget crisis will force the issue.

"If, in fact, Republicans decide to go back on their blood oath not to vote on any taxes or revenue raising measure, what kind of bill would they vote for?" he asks. "I think this is the kind of bill that they would vote for."

For now, Assembly Republicans remain opposed to all tax increases. From their perspective, imposing a tax on a disfavored group of retailers is unfair. It's an unlikely alliance, but when it comes to taxes, it seems pornographers and strippers have Republicans in their corner.

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