Originally published on Forbes.com Oct 24th, 2012
Strip joint decisions. There is nothing better calculated to bring out the inherent maturity in tax and accounting blogs. The first reference I saw to the New York Appellate Decision in the case of 677 New London Corporation was on Going Concern. The main focus of Going Concern is a satiric view of life in the major accounting firms – the trials and tribulations of capital market servants. They can’t ignore a case about whether stripping is an art form. There will be plenty more coverage. It inspires me to take a somewhat different tack.
The Decision
New York charges sales tax on admission charges to any “place of amusement.” That covers a lot. Among several other entertainment forms subject to tax, the decision mentions sporting events, stock car races and even zoos.
There is an exemption for “dramatic or musical arts performances“. The case was about the scope of that exemption. There does not seem to be much question that included in that would be performers dancing to music. With that said, many people would think that in the dancing area the exemption would apply to dancing like this.
They might think that the dancing that goes on in a place like Nite Moves, the establishment owned by 677 New London is of an entirely different sort and does not qualify for the exception. Questions like that are why we have courts. The appellate court ruled 4 to 3 that the exemption should be narrowly construed:
Clearly, it is not irrational for the Tax Tribunal to decline to extend a tax exemption to every act that declares itself a “dance performance.” If ice shows presenting pairs ice dancing performances, with intricately choreographed dance moves precisely arranged to musical compositions, were not viewed by the Legislature as “dance” entitled a tax exemption, surely it was not irrational for the Tax Tribunal to conclude that a club presenting performances by women gyrating on a pole to music, however artistic or athletic their practiced moves are, was also not a qualifying performance entitled to exempt status.
I think the dissenters had a point.
Like the majority and the Tribunal, I find this particular form of dance unedifying — indeed, I am stuffy enough to find it distasteful. Perhaps for similar reasons, I do not read Hustler magazine; I would rather read the New Yorker. I would be appalled, however, if the State were to exact from Hustler a tax that the New Yorker did not have to pay, on the ground that what appears in Hustler is insufficiently ‘cultural and artistic.’
I think the better way out of this would have been for the legislature to eliminate the exemption entirely, since it does create a significant gray area. The decision may well have been based on the “unedifying” nature of strip joints, which actually might not be such a bad thing. They are part of a disturbing social trend to which there seems to be no good solution.
Why This Is Not Funny
Disputes that touch on gender and sexuality generate tremendous discomfort. Sometimes the discomfort is dealt with by people going ballistic. Sometimes discomfort causes the dispute to be hidden. Other times it is humor. I predict that the 677 New London decision will produce a lot of amused commentary. It might be better to take the underlying discomfort more seriously.
People who are outraged by establishments like Nite Moves will sometimes use the term “pornstitution” to demonstrate the integrated nature of the complex of problems created by pornography and prostitution. They don’t see any fundamental difference between the two. Certainly, if there is a distinction between pornography and prostitution, a place like Nite Moves which includes “private rooms” might be on the fuzzy boundary between the two. Critics will say that pornography exploits and demeans women and creates unrealistic and dangerous notions about the nature of sexuality in the minds of young men.
The contrary argument is that the people involved are free agents, for the most part anyway and we don’t want an army of prudes regulating harmless entertainment. Here is a thought experiment to perform, if you incline that way. Imagine an 18 year old woman. For whatever reason she is not an academic achiever. Her high school provides vocational guidance. The counselor evaluating her skills suggests she consider adult entertainment as one of her career options. Would that really be OK ?
Extremes Sometimes Converge
In a Teaching Company course on Greek mythology, the instructor made a very interesting comment. Nobody can recognize a mythology from inside of it. You can see other people’s mythologies, but yours is not a mythology to you. To you, your mythology is the way the world is. Nowadays people in the United States who think slavery is just fine and that people’s rights should hinge on their race are on the lunatic fringe. In 1840 people who advocated the immediate abolition of slavery and full equal rights for Americans of African descent were the lunatic fringe.
Their opposite numbers were not people who thought slavery was OK . To get as lunatic fringe on the other side you had to be one of the very small group who believed that the trans-Atlantic slave trade should be revived in the interests of humanity. Extremists stand outside their society’s mythology and sometimes see things the rest of us cannot see. They are willing to follow the logic of positions all the way through. Whenever people with extreme views start from very different premises and arrive at the same conclusion, the rest of us should pay attention. That is the case with “pornstitution”. Consider these two statements:
Everything therefore in the modern means of social communication which arouses men’s baser passions and encourages low moral standards, as well as every obscenity in the written word and every form of indecency on the stage and screen, should be condemned publicly and unanimously by all those who have at heart the advance of civilization and the safeguarding of the outstanding values of the human spirit. It is quite absurd to defend this kind of depravity in the name of art or culture or by pleading the liberty which may be allowed in this field by the public authorities.
And:
We must be encouraged to open our minds to the possibility of replacing free speech with a concept of fair speech. Social issues must be analyzed in terms of harm to both individuals and groups of people. Hate speech should be made a criminal offense, and pornography should be interpreted as hate speech against women. To the end that the human dignity, equality, and freedom of both sexes should be honored and protected…
It is probably not very challenging to figure out which statement came from Radfem Hub and which one came from Pope Paul VI, but the convergence is eerie and not something to mock. So that is why I will not be yucking it up about the 677 New London decision.
I asked lawyer activist Cathy Brennan to take a look at the decision and share her thoughts. Here is what she had to say:
The court’s decision is heartening in that it does not allow an entity that exploits women to pretend that it actually employs such women for “dramatic or musical arts performance.” Pole dancing and lap dancing constitute sexual exploitation of women by men – if it’s going to be legal for men to buy women in this way, government should at least tax the hell out of it.
You can follow me on twitter @peterreillycpa.