Repost: Senator Set to Propose 25 Percent Tax on Adult Websites

Sorry, I forgot that this had already been posted... But I guess it does bear repeating....



http://www.avn.com/index.php?Primary...tent_ID=233801

Senator Set to Propose 25 Percent Tax on Adult Websites

By: Kathee Brewer



WASHINGTON - Draft legislation seeking stringent age-verification standards and a 25 percent tax on all adult entertainment revenues generated via the Web is likely to be introduced in the Senate within the next few weeks, according to information obtained Tuesday by AVN.

Sen. Blanche L. Lincoln (D-Ark.) initially planned to announce The Internet Safety and Child Protection Act of 2005 Wednesday morning, but changed her mind after it was announced that President George W. Bush would nominate a potential replacement for retiring Supreme Court Justice Sandra Day O’Connor Tuesday evening.

Although under revision late Tuesday, a draft of the legislation places primary responsibility for its enforcement in the hands of the Federal Trade Commission. Violations of the proposed legislation would be treated as violations of the section of the Federal Trade Commission Act that deals with unfair and deceptive trade practices.

The proposed act is divided into two sections. Title I stipulates “an operator of a regulated pornographic website shall verify that any user attempting to access their site is 18 years of age or older using software certified for that purpose … prior to the display of any pornographic material, including free content that may be available prior to the purchase of a subscription or product”(emphasis added). Title II attempts to fund enforcement of Title I and various other activities related to children and pornography by imposing a 25 percent tax on gross website receipts. The bill also would amend the Internal Revenue Code of 1986 to include a revenue category called “Internet Display or Distribution of Pornography.”

A “regulated pornographic website” is defined within the draft bill as “a person required to maintain documents verifying the age of persons engaged in sexually explicit conduct pursuant to section 2257(a) of title 18, United States Code.”

The draft bill also includes a provision mandating “a bank, credit card company, third-party merchant, Internet Payment Service Provider, or business that performs financial transactions for a regulated pornographic website shall only process age-verified Internet pornography credit card transactions for sales. ...” If that provision survives and the bill clears the House and Senate and is signed into law, it could prohibit such billing mechanisms as online checks, dialers, prepaid access cards, and SMS payments for electronic adult content in the U.S.

Lincoln, a second-term Democrat, considers the legislation important “as a parent, not as a politician,” according to Drew Goesl, her press secretary. “In her eyes, [the bill is] necessary to make the Internet safer for kids.”

To that end, Lincoln included funding for child protection programs within the draft bill: “There is established in the Treasury the Internet Safety and Child Protection Trust Fund … into which shall be deposited all taxes collected” from adult websites. Subject to annual appropriations, monies in the trust fund would be disbursed to the U.S. Department of Justice and the states for “crimes against children” programs; to private-sector companies, organizations, and individuals for research in filtering technologies; to educational agencies for “training contributing to greater child Internet safety and reductions in sex trafficking and sex crimes against children,” and to federal agencies to combat sex trafficking and crimes against children.

At least one high-profile adult entertainment impresario finds the bill’s provisions absurd. For one thing, says Kick Ass Pictures owner Mark Kulkis, the definition of “content producer” under 18 USC §2257 remains up in the air pending the outcome of a legal challenge to the regulations by the Free Speech Coalition. Until the fog surrounding 2257’s regulations clears, it’s going to be impossible to determine what qualifies as a “registered pornographic website” under the proposed bill.

In addition, Title II of the draft legislation “is blatantly unconstitutional,” Kulkis says. “To tax one type of expression and not others is blatant censorship. It would be the equivalent of taxing all Spanish-language media and using the funds to combat illegal immigration.”

Kulkis, notorious as the Republican porn magnate who, by invitation from the National Republican Congressional Committee, attended a Bush-hosted fundraiser in Washington, D.C., in June with adult performer and former California gubernatorial candidate Mary Carey, is incensed by continuing efforts in the mainstream to tie adult entertainment and child pornography into one neat, tidy little package. “First of all, we all make plenty of money selling porn to adults,” he says. “We don’t want anything to do with kids.”

While he said he thinks Lincoln is well intentioned, he doesn’t believe Title I of her bill, at least as it exists in the draft, will be effective at keeping kids away from online smut. “Really, the only way [to do that] is for parents to exercise good, old-fashioned parenting,” he says. “Keep an eye on the kids. If you discover they’ve been on porn sites, give ’em a good, old-fashioned spanking.” After all, he notes sheepishly, it worked with him when his parents discovered the copies of Playboy he’d hidden in his room as a young teen.

“The most the adult industry should be required to do is provide fair warning that you’re about to enter an area with explicit content,” Kulkis continues. “Beyond that, beyond the honor system, it’s pointless. The kids that want to watch this stuff are going to go through a bit of effort to get to it. How difficult is it to get dad’s credit card or driver’s license and pretend you’re him? In a [brick-and-mortar] store, you can physically check ID, but you can’t do that over the Internet.”

Kulkis admitted some adult websites beg for trouble by flaunting explicit content on their home pages, unprotected by any sort of “splash” page or warning label. “That’s like an adult store putting hardcore [product] in the front window,” he says. Still, barring some sort of biometric solution that recognizes identity based on fingerprints or retinal scans, “an absolute guarantee [that kids couldn’t access adult materials online] would be so restrictive that it just wouldn’t work.”

According to the draft, the bill, if passed, would take effect January 1.