Re: If you can't get rid of it...Tax it
Mike, with cigs, and with states adding on their taxes on top of federal, yep, I would have to agree with you. If the tobacco companies didn't have the third world and other places without taxes to make up for it, they wouldn't be around. They still have outlets to offset it. Online porn doesn't have that.
Here's some irony. Being brick and mortar, they can go elsewhere. Online porn has the world for a market, yet (with US webmasters) it will be taxed by where the owner lives, the server is at, etc and won't have the same kind of option to seek out a better geographical economy in which to thrive.
That is, Phillip Morris has only to build a new building in China and call it a new division, for instance, without leaving the US completely to get the local tax breaks. For a US webmaster or company, we can't do that. One would have to leave the US permanently to gain the same advantage. Definitely screwed up.
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