Balancing the Budget with a Pleasure Tax

The city of Dortmund in Western Germany has found a rather unique way to help it battle a €100 million deficit.  They have introduced a "pleasure tax" on prostitutes; each prostitute must purchase a "day ticket" for €6 for each day that they wish to work.  The tax is expected to raise about €750,000 to the city's coffers annually.  Alternatives like charging a €1 or €2 red light district entrance fee that would be paid by clients was also considered, but it did not get much support.

Prostitution was legalized in Germany in 2002; the country has an estimated 400,000 registered sex trade workers according to Hydra, the organization that represents prostitutes in Germany.  German cities other than Dortmund have implemented similar taxes on top of the income taxes that prostitutes must pay on their incomes.  Prostitutes in the city of Cologne must pay a €150 monthly "pleasure tax".  Those that are involved only part-time in the sex trade pay a €6 per day tax rather than the monthly fee. Cologne implemented the tax in early 2004 in an attempt to reduce a €385 million budget deficit.  The tax was expected to raise about €2.7 million annually from local brothels, massage parlours and table-dancing clubs.  There are about 3000 legally registered prostitutes in Cologne; they are required to register with local health authorities for regular checkups.  Many people involved in massage parlours in Cologne were worried that implementation of the tax would drive customers to nearby cities that had no "pleasure tax" since the cost of the tax in Cologne would have to be passed on to customers.

Just in case you are interested, the largest brothel in Europe is located in Cologne.  Pascha, which opened in 1972, is located in a 12 story building.  The business is open 24 hours a day and has more than 120 prostitutes on board and an additional 80 staff members.  One floor of the building is reserved for "low cost services" and another for transexual prostitutes.  There are several bars and nightclubs on the premises as well just in case you want to be entertained publicly.  The brothel "entertains" about 1000 clients daily.  The rooms in the brothel are rented to prostitutes for €180 per day which includes meals, medical coverage and Cologne's "pleasure tax".  Customers pay €5 to enter the premises where they are free to negotiate with the staff who ultimately keep all of the fees paid.  Oddly enough, customers over 65 years of age pay half price for services during afternoons.  You should probably also note that Pascha also has a money-back guarantee should you happen to leave unsatisfied.  Here's Pascha's website in case you are interested (unfortunately, the text is in German but you'll get the idea from the photos). 

All in all, a rather interesting solution to a budgetary crisis, don't you think!   Perhaps the United States will ultimately have to consider this route to balancing its annual trillion dollar plus deficits.