Editorial: Taxing problems and solutions

The Daily News has an editorial this morning reacting to Gov. Rendell's budget address. The editorial board argues that Rendell is making the right move by taxing natural gas extraction and eliminating loopholes in the sales tax. Most of the new revenue will be set aside to replace lost federal stimulus dollars.

The Stimulus Transition Fund would be funded by eliminating 74 exemptions in the sales-tax code - ranging from fish food and coffins to dry cleaning and candy. By eliminating these exemptions, the state will still realize $1.2 billion over two years, even with an accompanying 2-point cut in the sales tax.

Eliminating these exemptions is, for the most part, a wise move; most exemptions represent nothing more than the influence lobbyists have on the legislative process. There's plenty of evidence of this in the disparate list of items currently exempt . . . and the weak defense some lawmakers are already offering for keeping them.

We can't help but be somewhat impressed that Rendell figured out how to increase revenue and actually decrease the sales tax on most items. That's quite a bit of fiscal ju-jitsu. The editorial ends with a reminder of who should be calling the shots in Harrisburg.

Tax policy should be left in the hands of the people we elect, not the well-funded trade associations and lobbyist groups. In such dire budgetary times, closing those loopholes is a fiscally sound move.

We'll have more analysis of Rendell's budget later today. For now, check out today's “Morning Money” for a round up of reaction across the state.

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