Tax Day Rally Photos (2011)

Yesterday we explained why sin taxes can work, despite the feelings of those that just want to tell the religious types to GTFO of the legislative process. While we agree that religious based legislation is a bad — nay — a horrendous idea, since more states refuse to legalize and tax certain things like marijuana, gambling, prostitution, among others, our elected officials have started coming up with even far worse ideas that the Texas pole tax.

The Times ran a story over the weekend that examined various states and what types of services they are taxing to close their budget gaps. While many states are considering taxes on professionals like lawyers and accountants, legislators in other states have gotten so desperate it appears they’re just pulling ideas straight out of their asses:

In Nebraska, a lawmaker has introduced a bill to tax armored car services, farm equipment repairs, shoe shines, taxidermy, reflexology and scooter repairs. In Kentucky, Jim Wayne, a state representative, and some fellow Democrats are proposing taxing high-end services: golf greens fees, limousine and hot-air-balloon rides, and private landscaping.

In June, voters in Maine will decide whether to accept a state overhaul of its tax system that would newly tax services like tailor alterations, blimp rides, and entertainment provided by clowns, comedians and jugglers.

We get it. States are desperate for revenues but these are the ideas? A juggler tax? Taxing your shoe shines? How’s this idea for taxing a service? Prostitutes! A service is being provided, yes? Make it a 50% tax, whatever the hell you want. Plus, more people getting laid might actually cut down on the crazies taking matters into their own hands.

We decided to get a service provider’s (not a prostie) thoughts on the matter, so we asked resident GC tax expert Joe Kristan for his thoughts:

Being a service provider myself, I can’t say I’m excited about the idea. Still, standard tax theory would say that services should be covered to make the tax as broad as possible, allowing (in theory) a lower rate. Iowa taxes a bunch of services, including foot reflexologists (you’d thank that would take care of the budget right there), but CPAs and lawyers are exempt. I’d say it’s because we’re special, but mostly it’s because we have special lobbyists.

All right, so maybe there’s a “theory” to it but something tells us it has nothing to do with taxing clowns.

States Seeking Cash Hope to Expand Taxes to Services [NYT via Web CPA D&C]