Would legalizing prostitution help the US economy?

A Nevada brothel owner says America is missing out on billions of dollars in taxable revenue.

By Bruce Kennedy Dec 13, 2012 11:54AM

Image: Couple holding hands (Corbis/Corbis)The fiscal cliff dilemma is prompting some novel ideas on how to reduce the federal deficit -- including the highly questionable suggestion of turning Uncle Sam into a pimp.


Enter Dennis Hof, owner of Nevada's Moonlight Bunny Ranch brothel. Hof has proselytized for years about decriminalizing prostitution outside his state, and argues that a legal and taxed sex trade could do economic wonders.


"The federal government receives $6 billion a year now, off of liquor," he said in an interview with the Huffington Post. "The prostitution industry in America is about an $18 billion business, and none of that money goes into the federal coffers or goes to pay taxes."


With his plan, Hof says, the government would gain about $6 billion in federal income tax "from the girls" -- plus nearly $2 billion more in licensing fees.


According to the Christian Post, the international sex industry is a $30 billion a year business -- with hundreds of thousands of women, men and children coerced into a brutal and degrading life as prostitutes. 


Hof says decriminalizing prostitution takes money out of the hands of criminals, eliminates sex trafficking and combats the spread of sexually transmitted diseases. "You can't stop it," Hof told the Huffington Post. "Prohibition doesn't work and legalization can solve a lot of our problems."


But even if you put aside the obvious moral issues surrounding a decriminalized prostitution industry, there are some doubts whether it would actually reduce crime.


Some advocates look at countries like the Netherlands -- where prostitution is legal. It's even an active and publicized part of the tourist trade in Amsterdam, bringing in about $100 million a year.  But Amsterdam officials say legalization did not end crime, human trafficking, money laundering or drug abuse in the city's Red Light District.


"While legalization was supposed to turn prostitutes into self-employed taxpayers who did not need pimps for protection," Reuters reported in 2007, "the city said the industry is still dominated by criminals attracted by the 370 Euros ($484 U.S.) each woman can earn a day."


And a new academic report, looking at data from 116 countries, found a higher instance of human trafficking in countries where prostitution is legal.


"Our research suggests that in countries where prostitution is legalized, there is such a significant expansion of the prostitution market that the end result is larger reported inflows of human trafficking," said Eric Neumayer, Professor of Environment and Development at the London School of Economics and Political Science, and co-author of the report.


"While legalizing prostitution can have positive effects on the working conditions of those legally employed in the industry, it also appears to boost the market for this fast-growing global criminal industry."


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Tags: Economy
336Comments
Dec 13, 2012 4:21PM
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Boy are we getting creative...and guys...what's good for the goose is also good for the gander.  How would you like the idea of your wife up for a night out?
Dec 13, 2012 4:20PM
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Yeah - I am in favor of legalizing prostitution.  But in a way it is legal.  The government wanted all that proabition booze tax money from Capone.  If he would have paid taxes on the money they, as I understand it couldn't have touched him.  And when I was last in Vegas we were talking to a couple of pros and they said they pay taxes on their earnings. They seemed sincere, I had no reason not to believe them. And I also doubt if we really realize how big the trade really is.  I believe the tax gains would be enormous
Dec 13, 2012 4:18PM
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Why is it legal for me to go to a club I don't want to go to, dance to music I don't want to dance to, buy drinks that I don't drink, so I can meet a woman, exchange numbers then take her to a movie I don't want to see, and to dinner to a restaurant I don't want to eat at, just to see if there is a spark there to hook up.? Why is it then illegal for me to say to a woman, here is $150.  Lets have some great sex, then YOU can go to the club that YOU want to go to, dance all night, buy yourself a few drinks, get something to eat and go see the movie tomorrow?  Either way I spend the same $150, just the legal way I also have to endure the club, music, movie, drinks, and restaurant.  Makes no sense.
Dec 13, 2012 4:17PM
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Do they have buy nine then get one free cards.

Dec 13, 2012 4:17PM
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Legalize and tax weed! At least the quality could be controlled.

 

Dec 13, 2012 4:17PM
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I'm in, good idea get tax money and regulate the industry.
Dec 13, 2012 4:16PM
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Our government elected officials are already in the prostitution business driven by money they recieve in donations into their re-election coffers
Dec 13, 2012 4:16PM
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Talk about prostitutes, we are all prositute for the man. Workin on Obama's Plantation.
Dec 13, 2012 3:41PM
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It would be a good idea and cut down on marriage as it is the same as marriage. Isn't it  almost the same as same sex marriage?   If something is illigal it should be same sex marriage.  Prostitution is

 just another way of making a living.

Dec 13, 2012 3:04PM
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Kellen....Pretty much the way it was back in the 1800s (US) every place had upstairs rooms.
Dec 13, 2012 2:39PM
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Of course it would help the economy - but the bible-thumping wives of the men that are sexually neglected (and use hookers the most) will not allow it and take up protesting in the streets.  Those women would rather their husbands remain unemployed and unsatisfied so they can make him miserable than allow something that is already going on to be useful to society as a whole.
Dec 13, 2012 1:42PM
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"Would legalizing prostitution help the US economy? "  You bet it would - that way there would be a "happy ending" for everyone.
Dec 13, 2012 1:37PM
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Older and law-abiding people could be spared of misery of not having some of the basic human enjoyment
Dec 13, 2012 12:36PM
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And why would an existing industry that successfully functions underground would suddenly go legal and pay taxes?
Dec 13, 2012 12:36PM
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Don't we get enough sex from the government already?
Dec 13, 2012 12:34PM
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Thursday must be trash day at MSN except that instead of throwing out bad articles, they get published today (re: Kennedy, Mirhaydari, Petersen, and the one about the 5 funds for your 401K.).
Dec 13, 2012 12:33PM
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The Nevada brothels are expensive, and would not be a very accurate model of what would be the normal business. I think bars or nightclubs are better to meet the pro's, Plus having  rooms above or around the place is more discreet. Screw the brothel franchise market. If prostitution were legal we would not need brothels. 

Dec 13, 2012 12:10PM
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It might be good for the economy but it would be terrible for my checking, savings and IRA account balances.
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