Taxing Video Games

will posted 01/27/08 @ 6:34AM EST

The two certain things in life are death and taxes. I wouldn't be able to write an article on taxes without using that cliche phrase, so I'm getting it out of the way now and not mentioning it again. You may be rightly wondering why I, a chemist, would be writing about taxes.

Moneybag

Among my many RSS feeds are a few video game blogs, including Joystiq. Where's the connection? The article which prompted this was entitled, "New Mexico legislators consider video game tax for outdoor programs". This sort of tax seems that it would be unlikely to pass, so I wouldn't think twice about it. The only reason it caught my eye is because it looked very familiar. I looked back, and sure enough, earlier this month there was another similar article entitled: "Wisconsin politician proposes 1% tax on video games". These articles were written within three weeks of each other. Looking back even farther, I found: "Let's tax games, proposes Texas senator".

Consoles

The push in New Mexico is being proposed by the Sierra Club, who tried for this tax last year unsuccessfully. The taxes in Wisconsin and Texas were proposed by democratic senators. Tiered taxes exist already, for instance here in Washington, DC, sales tax is 5.75%, however in restaurants it is 10%. Most states have added excise taxes (I spent some time on Wikipedia) for cigarettes, gasoline and alcohol. These can also be called Pigovian, or more commonly sin taxes.

IRS

Should video games receive a "sin tax"? Obviously I'm going to take the side against it, since I play them and would rather not pay more. What are the arguments for such a tax? The Sierra Club's tax in New Mexico would have the proceeds go towards programs that "would counteract the negative effects of video games -- lower academic scores, obesity, and increased attention-deficit disorder." In Texas, the argument employed is that "if school-aged kids are spending a lot of money on video games" or parents are spending a lot of money on games for their school-aged kids" these consumers can spend a little bit more in order to improve their school systems".

Outdoors

I support better schools and outdoor programs to improve public health, but why should video gamers pay more than other people to support these efforts?


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