Among Western democracies, prostitution is already legal in the Netherlands, New Zealand, and (I believe) Australia. I see no reason why it shouldn't be legalized, regulated (to guarantee the safety of the sex trade workers), and taxed.
Much like how the ill-advised "war on drugs" has done little to curb supply or demand but done lots to increase related crime, legalized prostitution would protect the women from pimps and also get them "in the system" so that they pay income tax and also qualify for welfare, CPP, etc.
As Agamemnon said, prostitution exists whether we like it or not; they don't call it the world's oldest profession for no reason. Rather than trying to shove it under the rug, it's far more pragmatic to legalize and control it.
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