Wisconsin’s Game Tax – Sin vs. Luxury vs. Lunacy

The proposed “Game Tax” from Wisconsin state senator Jon Erpenbach has gained quite a bit of attention, and accordingly, I thought it was worth addressing a few key points. First, I’m sure many folks are wondering why they should care about a tax in a state in which they don’t live. The simple answer is that tax ideas seem to spread. If Wisconsin adds such a tax, it will only be a matter of time before a dozen other states follow suit. In short, the long term picture is not pretty for gamers if one state begins taxing games.

The second question is what type of tax is this? There are two likely candidates, those being the “Sin Tax” and the “Luxury Tax.” The concept of a sin tax is that because the government wants to discourage a behavior and because that behavior has a proven, clearly demonstrated, and direct negative impact on society, the government taxes the item to both discourage the behavior and offset the negative impact. For example, cigarettes are taxed because they are linked to lung cancer. Alcohol is taxed because drunk drivers kill thousands every year. Video games, however, would be taxed due to an unproven link to a theoretical change in behavior for a small number of users. The link is not nearly as defined as, say, drinking to drunk driving.

The other possibility is considering it a luxury tax. The idea here is that some things are just so extravagant that people should pay extra, or from a different viewpoint, that the people who want to buy certain things are well enough off that they can afford to pay more taxes. A good example of products often hit with a luxury tax are expensive cars. The assertion here would be that video games are a “luxury item,” and therefore are so unnecessary that gamers should have to pay more for them. However, given that books, music, movies, and all other forms of entertainment are not subject to such a tax, it does not follow that any aspect of the “video game” so separates the medium from other forms of entertainment as to draw the line there.

This would appear to be nothing more than another cheap shot at a scapegoated industry for the basic purpose of continuing to fill the already bloated public coffers, which serves to continue to perpetuate the problem of government over-spending. Far be it for me to dictate public policy in Wisconsin, but a video game tax is simply not a logical answer to the issue presented. I’m certain there are many other ways to fund the “keep non-violent juvenile offenders out of adult prisons” program.

[Via GamePolitics]

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About Mark Methenitis

Mark Methenitis is an attorney in Dallas Texas. Mark received his Juris Doctorate and his Master of Business Administration from Texas Tech University and his Bachelor of Arts from The University of Texas.

2 Responses to Wisconsin’s Game Tax – Sin vs. Luxury vs. Lunacy

  1. Jeremy says:

    I’m curious to see say in 20 years when gaming is even more common than it is today and the politicians grew up gamers themselves if this will even be an issue.

  2. Prey says:

    This tax could only help Nintendo, because they are the only ones who could afford to sell the games cheaper to offset the tax.

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