BUSINESS AND FINANCE
Thursday, July 17, 2003
Charlie Le Duff
Nevada prepares to tax its brothels
With tourism numbers declining and tax revenues from the casinos down, the state of Neveda is now seeking to tax brothels to pay for essential public services, writes Charlie Le Duff
Dennis Hof is known around the state of Nevada as "America's pimp", a man who is an agent for prostitutes and lives off their earnings. He calls that a statement of fact, and he works hard to maintain his title. Hof, 56, is the proprietor of the Moonlite Bunny Ranch, Nevada's oldest modern brothel, tucked behind an industrial park on the outskirts of the state capital.
So renowned is his establishment, opened in 1955, that Hof says he is considering a run for president of the United States.
Hof employs a rotating stable of 1,000 women, all registered with the authorities as mandated by law, and business could not be better in the world's oldest profession. "We like to say we provide men with fantasies they can't get at home," he said.
"Just leave the wife and kids at the casino and spend the afternoon with us. Everybody wins."
But the good fortune that Hof and his employees have enjoyed could be threatened. Nevada needs money, and while law-makers find it difficult to agree on some things, they are in accord that sex sells, and it should be taxed to help pay for children's education.
Since the gold-rush days, Nevada has leaned toward individual freedom. Gambling, drive-through weddings, quickie divorces and sex for hire are good. Taxes and government are bad.
In fact, the state constitution prohibits a state income tax. Moreover, there is no business tax, no payroll tax and no banking tax. The state does get a percentage of casino revenue. But with tourism down and Indian casinos siphoning off the gambling business, the state has a deficit projected at $860m to $lbn over the next two years, depending on whose numbers you believe. Assemblywoman Sheila Leslie, a Democrat, came up with the idea to include brothels in a 10% tax on live entertainment.
"Some say prostitution is not entertainment but a social service," Leslie said. "You can laugh about it, but prostitution is a legal business in this state, and we need to look at it as a source of revenue."
The state has 28-or-so brothels; currently they are legal in ten of the 17 counties in Nevada.
William J. Raggio, the Senate majority leader, burned down a brothel by court order when he was a district attorney. These days, he is philosophical about the sex levy. "It's a unique business," he said. "They sell it, you get it and they still own it. Still, we're going to tax it."
It is not so much the money as the inhumanity of the gesture that makes some prostitutes angry. It seems they don't appreciate being objectified. "We provide a service, not a commodity," says a woman who calls herself Air Force Amy, age 37. She began her career 13 years ago after drinking a couple of wine coolers, and the rest is history, she said with a giggle. She earns $10,000 to $50,000 a month, and argues that she already pays federal income tax. A state tax on the establishment would be passed on to her, she said, in effect taxing her income. That, she said, is unconstitutional. "They should stop picking on an easy target and go after the drug dealers and panderers and the big companies," she said in an indignant, lawyerly tone.
On being buzzed into Hof's establishment, a visitor was greeted by a chorus line of "independent contractors" clad in lingerie and pumps.
Hof sat at the back bar drinking fruit juice, and the first sentence he uttered was something about his beloved brothel and the love of his girls. He is a large, burly man with steel-blue eyes, thin swept hair and a tan so deep he blends into the red lighting. He insisted he already pays around $500,000 a year to Lyon County, the site of the Bunny Ranch. If the state demands a 10% cut, he'll go broke, he said. The house takes half the women's earnings. "It's not right to balance the budget on the backs of girls," he said. "It's un-American."
A former real-estate broker, he describes himself not as an exploiter but a man who has done much good - who gave soldiers free services when they returned home from Iraq, who makes dreams come true, who is responsible for keeping 1,000 women off the streets, who makes sure they have doctors and a clean work environment.
"We've never had a case of disease here," he said and then threw out a statistic that 100 prostitutes were killed on the streets of America last year. "Why would they destroy something that works?" he asked.
And then he works out the sums. "I'll just have to start charging rent, and ultimately this will come out of the pockets of the girls."
Created: January 9, 2004
Last modified: January 14, 2004
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