Thursday, September 27, 2012

Should lap dancing be taxable?

Good morning economists. I recently came across an article from USA Today on a court case involving "Nite Moves", a  strip club located in Albany. Apparently the strip club owes the government $124,000 in taxes (the 8% sales tax) from nude lap dances given to customers.

The strip club refuses to pay as it argues that lap dancing is a form of art which is considered as tax exempt.
 
 The New York Attorney General argues that "such a dancer isn't engaged in a genuine choreographic dance performance when she removes her clothing."

Although hilarious, this point makes me wonder whether traditional cabaret shows like Moulin Rouge or Crazy Horse should be tax exempt. How many pieces of clothing need to be removed so that the appropriate tax treatment applies?

Have a nice, fully clothed day!

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