What'll They Tax Next?

Some states have already slapped taxes on blueberries, illegal drugs and fur clothing. But as budget shortfalls grow, state legislators are looking for even more creative ways to earn revenue.

A Little Off the Top
Your next trip to the barber could trim a little more than usual from your paycheck, depending on where you live.
In an attempt to balance their budgets, states like Michigan and Nebraska are considering making you take a haircut, by extending the
state sales tax to include personal grooming services.
"These states are expanding the services they're taxing, and a haircut is considered personal grooming and can be seen as a luxury item," said Kim Rueben, a senior fellow at the Urban Institute. "And while you might not think a haircut is a luxury item, you could always do it cheaper or at home."

Pulling a Tax Out of a Hat

Lawmakers in Maine are going after children's entertainment to make a little extra money for the state.

A bill proposing a 5% state tax on a slew of things, including comedians, clowns, jugglers, ventriloquists, petting zoos, paintball and even haunted hay rides will be voted on this summer and would go into effect in January 2011.
"People make fun of the bill, saying we're taxing clowns and that kind of thing, but that's not the way to look at it," said Maine House Majority Leader John Piotti. "It's a comprehensive change and we're doing it in a very smart way."
But purveyors of such services are afraid their profits will disappear. Angelique Steelgrave, who works with her husband as a full-time magician, said that this tax will have a huge impact on small entertainment businesses like hers.
"We hate the idea," she said. "Not a lot of businesses these days have the luxury of raising prices 5%, and in a lot of cases, this could be a serious amount of money we would either have to charge clients or eat ourselves."