Sam Morris / 2006 file photo
Tuesday, Dec. 17, 2013 | 12:50 p.m.
Nevada’s brothel industry came into the crosshairs of Oklahoma Republican Sen. Tom Coburn’s annual “Wastebook” — a year-end hit list of programs he says epitomize financial excess in the federal budget.
Coburn argues that the Silver State’s prostitution industry — No. 6 on his list — is effectively being subsidized by the federal government through business tax deductions.
“Brothels can take deductions for groceries, ‘salaries and wages of prostitutes, rent, utilities and taxes and licenses,’” the report says. “‘Breast implants and...costumes’ have also been ruled allowable deductions by the Internal Revenue Service (IRS).”
Under the report heading of the none-to-subtle jab “Pimping the Tax Code," Coburn accuses the industry of bilking the federal government out of $17.5 million.
There is, of course, no special prostitution section of the tax code — brothels simply take advantage of normal business tax deductions.
But Coburn thinks that should change. He argues that an industry that is only legal in 10 of the nation’s 3,000-plus counties cannot possibly be the sort of economic driver that business taxes are intended to buoy.
Coburn even quotes Nevada Sen. Harry Reid — anonymously, but it’s him — deriding the prostitution industry with a remark from a speech before the Nevada Legislature: “Nevada needs to be known as the first place for innovation and investment — not as the last place where prostitution is still legal.”
Prostitution tax write-offs are just one of 100 items Coburn identified in his annual survey of government largesse.
Nevada got another nod on the list at No. 92 for the $800,000 the federal government spent on a 2012 Strong Communities, Strong Cities grant to help Las Vegas plan its continued recovery from the recession.
“To the Administration, Las Vegas is in such great need of a long-term economic vision that they would give out an $800,000 grant to pay for it,” Coburn’s report says, citing record increases in 2012 gambling revenues and home prices.