The true costs of sin taxing.

So anyhow, Texas, my lovely home state has passed a bill levying a statewide mandatory cover charge at strip clubs. The money will go to pay for rape crisis centers. The Onion couldn’t top that one.

However, there are several problems with the idea from an economic viewpoint. The first problem is that it creates a mandatory cover charge where there formerly was often not one. Topless clubs typically use free entry during the day and/or on slow nights to get customers in for the drink sales. Nude clubs (which are byob in all of Texas) don’t necessarily go the same route, but they are also fond of low entry fees during slow times of day to get guys in and spending. As nude clubs generally charge a fee to get dances (in the form of a wristband), a low/no cover charge early in the day or evening still benefits their bottom line.

But now the state legislature comes along and forces a fee that directly affects customers and which the club sees zero dollars from. Going from no cover to a mandatory minimum cover will drive customers away. The club cannot pass this cost onto girls in the form of higher housefees because the drink sale losses alone will be more than 5-10$ in extra house fees per dancer could make up. For nude clubs, who cannot sell alcohol and thus have an even harder time getting in foot traffic, the losses are even harder to offset (they already make up for drink sale losses in the form of house fees that are nearly double those of topless clubs).

Some key details worth noting:

In Austin, the clubs all have active dayshift attendence. There are decent numbers of customers buying drinks and dances, and generally no cover charges. In Houston, which contains about a third of all Texas clubs, guys still turn up during dayshifts for drinks, lunch buffets, and (a few) dances. So during what is a slow period of time (dayshift), in the two cities with about half of all clubs affected by this thing there is a lot of dayshift business that expects no cover charge.

Five bucks seems like nothing, but when you were coming to the stripclub with free cover for the five dollar buffet, it’s now an expensive indulgence ‘just for lunch’. If you were coming for lunch and dances, it seems like the club is trying to rip you off somehow and now you’re irritated. Irritation has subtle economic costs in excess of dollar amounts levied.

This is the most crazily feminist thing ever. ‘Visit a stripclub to stop rape!’ Yeah, that’s not problematic in any way….

None of this money goes to the girls, but clubs have a strong incentive to pass whatever cost of it onto them that they can. This will of course not exactly increase sympathy for the supposed rape victims the money is going to ‘help’.

Finally, Houston is attempting to close down nearly all its clubs. Considering that Houston stripclub revenue would be, you know, 33% of the presumed revenue, it is very interesting timing there.

This is mainly another instance of people thinking that sexwork should be taxed randomly, as if the people consuming it will just fork over more money for no particular reason and as if the people running it will just smile, nod and cut a check. Sexwork is damned lucrative, even occasionally for the product (the girls). But consumers and producers in the industry are not unaware of their expenditures, stereotypes aside. They will see this as quite silly (and already do) and it honestly has the air of clusterf*** about it.

It also doesn’t resolve the issues of actual rape in any way. It is a grand gesture, quite furious and loud, but ultimately signifying nothing. The exceptionally unhealthy dynamic that exists between sexworkers and their clientele in Texas (especially though not exclusively Houston) is a bit more pressing of an issue. But it’s complicated and it is so much easier to levy a tax that nobody will actually get around to paying to look like you care about women of all sorts.