Like people always say, when corporate taxes are discussed (and now I'm guilty of it too): companies don't pay taxes; consumers do.
Imagine Acme Inc selling Widgets at $100.
If taxes go up, the company's first instinct would be to increase the price. This works for some markets and products. However, if the customers and market are sensitive to price, they will lower or stop their consumption from Acme Inc. or move to competitors or substitute products e.g cooking at home instead of restaurants. In that case, Acme Inc has to pay the taxes out of their profits, assuming their profit was high enough, which results in lower profits, or takes losses and go out of business eventually.
How can that be. Wouldn't that simply increase the supply of strip clubs, from more getting into something thats that profitable.
So they are solving issue they themselves created with more laws. Heh.
e.g. good managers who take care of their dancers/customers get the best dancers and so attract the best customers.
Source: There's no way I'm telling
If you haven't been offered cocaine or orgasms for money at the strip clubs you've been to, you're doing it wrong.
That’s not the most obvious take away imo. I’d say it’s obvious that the strippers were doing a fair bit of tax evasion, but having known a few strippers, a successful stripper would still be making good money even with meeting all their tax obligations. The issue the clubs now face is that they can’t properly cover the risks of paying salaries to employees who’s revenue is entirely tip based. It’s really just a completely predictable outcome of a government trying to protect people from their own decisions with regulation. As a contractor myself I dread the day the government finally gets around to saving me from the working arrangement that I have benefitted so greatly from adopting.
The clubs, in order to compensate for all the "new" taxes, are only paying minimum wage, and are taking larger cuts of private dance fees from the dancers than they were before, and are in some cases tacking on new fees dancers have to pay, like "private room rental".
Dancers might be getting better benefits under the new rules (health insurance, sick days), but might not, since some of these benefits require minimum weekly hours worked that the dancers mostly don't meet. Dancers are also feeling pressure to be less choosy about what things they're willing to do for different customers, since "it's their job".
Really what it boils down to is that these are not sustainable businesses at the prices they currently charge customers, unless they also avoid paying a bunch of taxes. If they want to keep their dancers from quitting, they'll likely have to raise prices enough to get a similar amount of cash into the hands of their dancers, while also meeting their tax obligations. Not sure if that increase in cost will decrease demand to the point where it just won't work.