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Analysis: Porn Tax Won't Fix State's $20 Billion Budget Hole

Calderon's proposed tax ignores actual factors draining budget

Analysis: Porn Tax Won't Fix State's $20 Billion Budget Hole
PORN VALLEY — Free Speech Coalition lobbied hard last month against Assemblymember Charles Calderon's (D-Montebello) porn tax bill, AB 2914, gaining unanimous support from Republicans simply because they oppose all new taxes — and now Calderon's come up with a new porn tax plan, AB 1956, which would tax commerce in digital downloads like iTunes, ring tones, Netflix ... and, of course, adult VOD.

The legality of such a tax is questionable, since anything on the Internet is essentially in interstate commerce, the bailiwick of the federal government, not the state — and Congress currently has a moratorium in place forbidding any federal taxes to be laid on the Internet.

According to the Los Angeles Times, Calderon's a bit put out that everyone hasn't rallied to his original plan to tax, at a rate of 25 percent, adult products and services at all levels, the revenues from which would be earmarked to ameliorate the adult businesses' alleged secondary effects — and therefore have no effect of the budget shortfall.

"This is a major industry that is putting a disproportionate burden on state services," Calderon claimed without providing a shred of evidence. "Drugs are heavily used. The actors have a short life span. Some leave the industry drug-addicted with no skills. They wind up availing themselves of Medi-Cal and other state programs."

It's unclear why Calderon has such a hard-on for the adult industry, and both Free Speech Coalition and the California Association of Club Executives (ACE) are mounting campaigns to oppose the bills. Cal-ACE executive director Larry Kaplan is arranging for dozens of adult industry members to pack the Assembly's Revenue and Tax Committee hearing, which Calderon chairs, to oppose AB 2914 on Monday, and the groups expect that Republicans will renounce Calderon's porn-download tax as they've pledged to do with his adult entertainment venue tax bill.

Other tax proposals on the horizon include a 25-cent tax on plastic grocery bags (AB 2829); a $1.80 tax on six-packs of beer; and taxes on luxury vehicles like SUVs and yachts, based on how big their carbon footprint is (AB 2388 and AB 2638). There's even a proposal to put low-income senior homeowners to work in and around county offices in exchange for lowering their property taxes (AB 2459).

It's also noteworthy that the LA-based crew of ABC's hit show "Ugly Betty" have placed a full-page ad in today's Variety that urges state and Los Angeles officials to enact new tax incentives to keep "Betty" and other local productions local.

And of course, the Republicans have opposed all of the new tax ideas.

"Working people are looking at these taxes and saying, 'Are you kidding me? You are going to add more costs to my daily life?'" said Republican Assembly leader Mike Villines (R-Clovis). "People want us to live within our means like they do."

But the simple fact is, the state's legislators have dug its citizens into a very big revenue hole, and something will have to be done about it lest the state be forced into bankruptcy. The question is, which businesses (like the massive machinery of Hollywood) really do put the most strains on state services (like police and CHP handling alcohol-related traffic offenses, and the environmental clean-up required for the billions of plastic grocery bags) — and when will Republicans understand that necessary governmental services have to be paid for somehow?

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Mark Kernes

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