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."


More from Money Now

Tags: Economy
336Comments
Dec 13, 2012 6:29PM
avatar
Maybe the central state should reduce spending and worry less about raising revenue
Dec 13, 2012 6:25PM
avatar
Do not like legalizing prostitution.  How about a tax on sex?  How many men would consider it a badge of honor to pay every time they had sex with their significant other?  Bragging rights...my six tax is higher than your sex tax!
Dec 13, 2012 6:24PM
avatar
This two party system of government can't solve anything ! Don't give them something else to waste more taxpayer money debating for 6 years !
Dec 13, 2012 6:23PM
avatar

Well why not just more moral degredation and making it legal just makes it ok.  Now the divorce rate will go up and there's more tax money from the court cost, Attorney's fees!  Boy that's how you generate funds, but why not stop the prostitution in government and stop wasting tax payers money??

 

Dec 13, 2012 6:21PM
avatar
Just the thought of a woman being with that many men turns ME off....
Dec 13, 2012 6:20PM
avatar
The reality is that prostitution exists everywhere.    Making it legal might at least give the women some legal protection.  Now they have none and are ripped off by pimps and the police.   That it would reduce crime, probably not except crime against the women.  
Dec 13, 2012 6:18PM
avatar
Drugs are immoral.  Prostitution is immoral.  I have read that you judge an action's morality by the number of people it hurts.  These things are immoral.  Work is moral, families are moral, honesty is moral.  Illgotten gains aren't moral.  President Obama wants to rebuold our infrastructure,ie. roads and bridges, and if we have to sacrifice let the sacrifice be in yachts and private tennis courts, not in chemotherapy for poor children.
Dec 13, 2012 6:17PM
avatar
HE got a valid point. Why not try if for 10 years and see what cums of it?
Dec 13, 2012 6:17PM
avatar
Finally, people making sense.  About time...
Dec 13, 2012 6:14PM
avatar
I'm all ready to go! Be glad to hire my studliness out to discerning gals for a princely fee. Only concern is who'll be the "madam"? Gotta have a middle man, aka "pimp" who is honest and nuturing. No hard drugs and lots of perks hey could be a great lifestyle. Better than working a McD's for a pittance. Now the tough part is drumming up clients, although with the newly empowered female that shouldn't be too difficult. Just don't be too rough.
Dec 13, 2012 6:14PM
avatar

Hof left out one very important thing--most of or fine Senators and Congressmen are prostitutes now with what they take from the lobbyists and what do WE have to show for it, more spending taking care of the special interest groups.

 

Maybe reduce the spending and get rid of the Base Line budget automatic increases year over year and pass Real Budget that has not been done in several years.

Dec 13, 2012 6:13PM
avatar
Legalizing weed would raise much more money.  Here in WA it is projected to raise one billion in the first five years.  But the more cash the government has, the more they will spend.
Dec 13, 2012 6:13PM
avatar
AMEN.....there are a lot of guys that can't get layed without paying....oh wait....prostitution is legal...it's called Marraige....we usually end up paying more for sex with our wives than a "John" does.....we all pay in someway or another.....   :)
Dec 13, 2012 6:12PM
avatar
We're already paying a bunch of whores in Washington (all politicans!).  At least a legitimate prostitute would provide something in return for our money. 
Dec 13, 2012 6:09PM
avatar
Drugs aren't good for you.  Pot is worse than cigareetes for tar in your lungs, and the THC in marajuana is not good for your mind.  WRONG DIRECTION  Drugs ruined my life
Dec 13, 2012 6:09PM
avatar
Want to get things fixed right? Then why not make it so congress gets the same benefits or "entitlements" as the least of the citizens they represent? And the same health care. Also do away with their pay for life no matter how long they serve?
Dec 13, 2012 6:08PM
avatar

The question is managing the industry just like Banks, Aviation etc that we have not been good at.

 

But from social demand perspective it is badly needed. In the world where quantity and quality of sex is measured there are many who are left out of activity either due to not having attributes or skill or both. This has consequences on quality of life.

 

And there is a question of raiding other people spouse or side affairs.

 

For rich it exist anyway. It is a business that goes on. Legalizing may have benefit at lower spectrum in all respect including financial. Not so rich or beautiful and quality people at least have access to sex

Dec 13, 2012 6:07PM
Dec 13, 2012 6:07PM
avatar
I find it ironic that Republicans scream: "It's my money", "get your hands off my wallet", "stop telling what to do with my own money", "SMALLER GOVERNMENT"

Yet when it comes to things like legalizing prostitution or pot... they want BIG GOVERNMENT telling them what they can do with their money.


Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The stock market welcomed the new trading week with a mixed session that saw relative strength among large-cap stocks, while high-beta names underperformed. The Dow Jones Industrial Average (+0.3%) and S&P 500 (-0.1%) finished near their flat lines, while the Nasdaq Composite and Russell 2000 both lost 1.1%.

Equities began the day on a cautious note amid continued concerns regarding the strength of the global economy. Over the weekend, China reported its first decline ... More

MSN MONEY'S