It's Hard Out Here for a Pimp


It's showtime for the American Values Agenda! And what better way to kick off than with a tax on sex? CNN reports:

The Senate Finance Committee is expected to vote Wednesday morning on the pimp tax. The bill also calls for more jail time for sex workers.

If passed, the provision will authorize at least $2 million toward the establishment of an office in the Internal Revenue Service Criminal Investigation unit to prosecute unlawful sex workers for violations of tax laws.

"Recent headlines have focused on sex trafficking in connection with the World Cup in Germany," [Sen. Grassley (R-Iowa)] said. "This vile crime is under our noses in the United States, and it's a no-brainer to have the IRS go after sex traffickers. Prosecuting these tax code violations can get these guys off the street and yank from their grasp the girls and women they exploit."

Never mind that the World Cup sex fest failed to materialize. And leave for a moment the presumption that the IRS will "get these guys off the streets." Instead, marvel at the apparent moral equivalence between commercial sex work and child slavery. As I wrote in Reason's May issue, the war on trafficking is quickly morphing into a crackdown on hooking.

NEXT: 'No Safe Level of Secondhand Smoke'?

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  1. Besides, aren’t brothels legal in Germany?

    So this is sort of, “we better tighten our laws because there were reports of a threat of something happening in a country where it’s legal, but didn’t?”

  2. Let’s see:

    Spend $2 million to try and stop something you can’t stop…


    Legalize and tax it, and actually make revenue, allow sex workers to go to authorities when a pimp tries to “grasp” them, etc.

    Only a Republican…

  3. As a polity, Americans are not mature enough to deal with sex issues. Don’t expect anything rational coming from the left or the right . . . but especially the right.

  4. In decent news the following 34 Senators actually give a shit about freedom of expression, on the Cloth Protection Amendment, anyway:

    Akaka (D-HI)
    Bennett (R-UT)
    Biden (D-DE)
    Bingaman (D-NM)
    Boxer (D-CA)
    Byrd (D-WV)
    Cantwell (D-WA)
    Carper (D-DE)
    Chafee (R-RI)
    Clinton (D-NY)
    Conrad (D-ND)
    Dodd (D-CT)
    Dorgan (D-ND)
    Durbin (D-IL)
    Feingold (D-WI)
    Harkin (D-IA)
    Inouye (D-HI)
    Jeffords (I-VT)
    Kennedy (D-MA)
    Kerry (D-MA)
    Kohl (D-WI)
    Lautenberg (D-NJ)
    Leahy (D-VT)
    Levin (D-MI)
    Lieberman (D-CT)
    McConnell (R-KY)
    Mikulski (D-MD)
    Murray (D-WA)
    Obama (D-IL)
    Pryor (D-AR)
    Reed (D-RI)
    Sarbanes (D-MD)
    Schumer (D-NY)
    Wyden (D-OR)

  5. A tax on sex? Well it’ll certainly make chartered accountancy a much more interesting job.

    Ah hell, here’s the link to the whole MPFC thing.

  6. Politician: Bravo, Madge. Well done. Taxation is indeed the very nub of my gist. Gentlemen, we have to find something new to tax.
    Second Official: I understood that.
    Third Official: If I might put my head on the chopping block so you can kick it around a bit, sir…
    Politician: Yes?
    Third Official: Well most things we do for pleasure nowadays are taxed, except one.
    Politician: What do you mean?
    Third Official: Well, er, smoking’s been taxed, drinking’s been taxed but not… thingy.
    Politician: Good Lord, you’re not suggesting we should tax… thingy?
    First Official: Poo poo’s?
    Third Official: No.
    First Official: Thank God for that. Excuse me for a moment. (leaves)
    Third Official: No, no, no – thingy.
    Second Official: Number ones?
    Third Official: No, thingy.
    Politician: Thingy!
    Second Official: Ah, thingy. Well it’ll certainly make chartered accountancy a much more interesting job.

  7. You may not believe this but your headline was the exact leadin for Fox6’s(San Diego) morning show’s segment on this.

  8. Damn, even more money taken out my pocket for government nanny staters to war on something they don’t like.

    Better build some new jail cells. K-a-a-a ching, go the government cash registers.

  9. The thing I don’t get is HOW IN THE BLAZING FUCKING HELL this is a Federal matter.

    I’m going to suggest that we simply declare the word “legislator” to be a close synonym to the word “goatfucker” and be done with it.

    Of course, that would then result in them declaring goatfucking exempt from their glorious new tax, since the Congress must never be held to the laws that it passes.

  10. As I wrote in Reason’s May issue, the war on trafficking is quickly morphing into a crackdown on hooking.

    Of course it is, breaking up trafficking rings is difficult work. Why do that when you can make headlines by busting hookers, then claim it’s making a difference in trafficking?

  11. Both the Sixteenth Amendment and the Internal Revenue Code already refer to “income, from whatever source derived,” so Grassley’s lament is disingenuous.

    Indeed, the IRS has a long history of post facto pursuit of convicted criminals for back taxes owed on their criminal income.

    What Grassley is really saying is that Congress knows better than the IRS itself how best to prioritize its revenue-collection programs.

    Framed in those terms, it becomes clear that this is petty grandstanding.

  12. I wonder if a blow job will be taxed more than say missionary only sex? Does it matter how long the sex last? If I am a three pump chump, will I have the same tax levy as say Ron Jeremy? Is anal sex extra? What if I don’t have a pimp and am an independent contractor? What if I hire identical twins…am I double taxed?

  13. Troy raises good questions, but do recall that our tax is a net income tax. A service provider can deduct cost of goods sold, and could deduct sales expenses, such as those mini skirts and CFM heels, as well as security costs.

    The sex worker should be taxed similar to the extraction industry, as it is exploitation of a natural resource with an uncertain life. There are regulations describing how the extraction industry deducts such things as percentage depletion and dry holes, and it should make an interesting application of the rules.

  14. Wait, whaddya mean this vile crime is under our noses in the United States?

    I thought prostitution was illegal everywhere but a few Nevada counties.

  15. Clean Hands: This is, of course, not a legitimate federal concern, and we already have the Mann Act to deal with interstate transportation, so what it comes down to is a grandstand play to allocate already scarce tax enforcement resources to busting common street pimps. The proposed penalties are innovative, though: 10 years per non-filed W-2. So, you have 10 employees? 100 years in the clink. As a practical matter, the new law will be meaningless, because the IRS will simply pick a couple of unfortunate Guidos to use as an example that they are doing something, and they will otherwise go on with business.

  16. Not so fast, Ron. The pimp will not necessarily be deemed the employer, but instead the provider of security services. And the hooker may not be an employee, if she gets to have certain discretion in how she performs her functions. For a great read, try 303 West 42nd Street Enterprises, Inc., Plaintiff v. Internal Revenue Service (cite as 96-1 USTC ?50,189.)

    The IRS attempted to classify the “dancers” as employees, and the court looked to what distinguishes an employee from a contractor. A fascinating and humorous read.

  17. Ayatollah, I don’t even want to think about how tax rules related to extraction, depletion and (gulp) dry holes will be applied to sex workers.

  18. When a Senator says that prostitution is happening right under his nose, I am inclined to take him literally, and believe him absolutely.

  19. “When a Senator says that prostitution is happening right under his nose, I am inclined to take him literally, and believe him absolutely.”


  20. Ayatollah: A 2nd Circuit Decision, interesting. The taxpayer was eligible for section 530 relief, based upon “industry practice”. Wonder how it came out on remand? The more I think about this issue, the less practical effect I think it has. I bet most prostitution activity is conducted through escort services and massage parlors, which would likely withhold on their employees already. At any rate, the proposed law certainly substantially raises the risks of treating them as independent contractors!

  21. I wonder if there is an equal protection argument here. Why should failure to file a W-2 for an illegal activity carry a greater penalty than failure to do so for a legal one?

  22. Are the people on K St who bribe legislators or the people who vote for a legislator the primary or managing pimps?

  23. The bill also calls for more jail time for sex workers

    Prosecuting these tax code violations can get these guys off the street and yank from their grasp the girls and women they exploit.”

    So in order to save them from exploitation they will be instead throwing them in jail for extended periods of time??

    And wouldn’t a hooker who has a pimp be an independant contractor (1099) instead of a W-2 employee? Or does the exclusiveness of pimps used make her a W-2?

  24. “The bill also calls for more jail time for sex workers”

    Seems fair as jail workers are getting more sex time on the job, eh?

  25. What they really need to do is crack down on pimps for failing to complete I-9 forms for their girls. Illegal immigrants may be taking jobs away from honest, hardworking, American whores!

  26. This country is so fucked.

  27. “This country is so fucked.”

    But at least it’s tax-free for the moment.

  28. 27 comments and no references to “Pimping Ain’t Easy”?

  29. If the War on Pimpin’ is as successful as the War on Drugs, prostitutes will be sexier, more plentiful and cheaper than ever in a few short years.

  30. the take home message is that when Sen. Grassley stated “…it’s a no-brainer…”, he clearly meant “I’m a no-brainer!”

  31. I don’t think the supposed victimless nature of prostitution is as clear cut as most libertarians would like them to be. Most prostitutes were sexually abused in the past, and many of them are basically enslaved by their pimps. Johns probably cost society in various ways as well, be it through detrimental effects on the family, disease, mistreatment or retrograde views of women, etc.

  32. bob – so what? Is the best way to help the women and men who sell sex for a living to keep the profession underground and illegal? Seems to me the best way to help them is to make it perfectly legal, have some sort of licensing requirements perhaps, and let people do what they’re going to do anyway.

    Just from the much better treatment that a higher-class prostitute, such as ones that generally work for escort services, receive pretty much proves the point. While prostitution is illegal, escorting is not…and although sex is often times part of an escort’s job, they are generally treated far better and paid much more that a street hooker. Not to mention, they generally have chaperones that keep them a lot safer from harm.

    The disease problem would also be better served by legalising the practice and requiring periodic check-ups of sex workers.

    Retrograde views of women? Now you’ve definitelty lost me.

    But the main point is that the libertarian viewpoint works incredibly well in easing the problems of many of the vices us humans have.

  33. I know I shouldn’t feed the trolls…

    I’ll just say that the idea of a pimp as kingpin is largely exaggerated. It’s fairly easy to operate independently; pimps are probably excluded to the realm of true trafficking. But either way, this shouldn’t be the domain of the IRS.

    One hundred twenty years ago, a lot of what is now various western states didn’t have laws against prostitution. It was the damn victorian influence from the east coast that shut the practice down, as statehood meant becoming a “modern” society. I think at some point it’s going to become defacto legal (if it isn’t already), but what happens in between now and then might include a lot of misery.

    One of the consequences of prostitution prohibition is that it’s a lot cheaper and easier for the promiscuous male to hook up with another male than to find a professional lady. (According to the laws of supply and demand — lots of horny guys, and very few promiscuous women.)

    Ironically, the cultural conservatives may be laying the groundwork for a bisexual bloom in the next few decades.

  34. What? No puns about a pole tax? Making ends meet? Coming up short? Winding up in the hole?
    Does one need a good head for business?

  35. Retrograde views of women? Now you’ve definitelty lost me.

    Well, it can’t be the American conservative argument seeing that their collective view of women is pretty reactionary to begin with.

    I think Bob is trying to co-opt the feminist argument against prostitution which states that sex work maintains the idea that women are property. Of course, this is a fucked up view of capitalism. When I go to Wal-Mart to buy a twelve-pack of Coke, I don’t “own” Wal-Mart, just the soda. If I hire someone for a job, the wages I pay them doesn’t buy the worker, just the product of their labor. The same goes for the prostitute. If I spend the night with the lady of the evening, I’m paying for the pleasure of having sex with her. I don’t “own” the women; she can stop at anytime, draw the lines at certain acts, set the price, etc..

    It’s called mutual exchange, Bob. I suggest you look it up.

    I’m sure in Bob’s world women give sexual gratification freely out of the goodness of their hearts. I love science fiction too, but this is the real world.

  36. I’ve been impressed with the answers to bob.
    I now wonder if a light went on in his head, or whether he went away mad.

  37. Well, I don’t do prostitutes. So what I really want to know are the tax implications of barter arrangements.

    For instance:

    • When I buy a sweet thing a couple of drinks, take her to dinner and a show, spring for a room, and send flowers the next morning are those deductable business expenses?
    • What are the multi-year capital investment implications of an engagement/wedding ring set.

    Stuff like that.

  38. Larry, most of tax law has a symmetry to it. Income on one side is deductible on the other. Alimony and child support are examples. Alimony received is income, alimony paid is deductible. Child support is neither.

    With that symmetry in mind, if your “sweet thing” costs are deductible, then you are doing prostitutes.

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