Just so we're clear, here's what happened in Harrisburg last week. The state needed more revenue, so everyone debated where to raise taxes -- what industry the state should potentially harm. And when the dust cleared, it was decided that we should jeopardize the arts, rather than people who sell cigars.
Under Governor Rendell's original proposal, a portion of the state's $3.2 billion budget gap would have been filled with a new tobacco tax -- a levy of 36 cents for every 10 cigars or single ounce of smokeless tobacco (the state already has $1.35-a-pack tax on cigarettes, and the budget deal raises that tax another 25 cents). This would have generated about $50 million a year.
Instead, under last week's agreement, the state will impose a new tax on tickets to museums and the performing arts. Cultural performances will no longer be exempt from the state sales tax. Outside of Philadelphia, the levy will be 6 percent; inside the city, it will be 8. Lawmakers estimate that the new charge will generate about $100 million a year.
This is crazy. Look, the state absolutely needs new sources of revenue. But this was the wrong way to go about getting it.
Pennsylvania is already a major outlier when it comes to tobacco taxes. Every other state-- even those with strong tobacco industries, like North Carolina, Kentucky and West Virginia -- have decided that taxing all tobacco products makes sense. Pennsylvania is in the mainstream on the amount levied on cigarettes-- we rank 19th out of 50th-- so why not on these other items?
Why is Pennsylvania different? Well, we're a major producer of tobacco products, too, and the lack of taxes on cigars has attracted some big manufactures to the state. Politicians are wary of angering businesses, especially during these tough times. What's more, Pennsylvania has the distinction of being the second largest consumer of “snuff,” or smokeless tobacco, among the states. Politicians, especially from rural areas, probably didn't want to offend a large part of their constituency.
But the thing is, a tax on these tobacco products would have been good public policy. According to the Center for Disease Control, smokeless tobacco contains 28 separate cancer-causing agents. Since the nicotine in snuff is directly absorbed into the bloodstream, it's actually more addictive than cigarettes. It's also popular among young people: a study done at the University of Michigan found 30% of snuff users were under the age of 21.
Nor is this a problem just for those users. Tobacco-related illnesses drive up health care costs, which non-smokers wind up paying through increased premiums. Taxing tobacco products will encourage less people to use them and improve the overall health of the commonwealth.
To re-iterate: Harrisburg lawmakers could have imposed a tax on a product that causes cancer and costs society, or they could have taxed the arts. I guess it's to their credit that it at least took them a while to make their horrible decision.
Not to mention that many of the venues that will now be required to collect sales tax have never done so. This creates an additional burden on those organizations that costs them real money - you're not just taxing their patrons and thus putting downward pressure on their already ailing attendance figures, you're adding a new administrative expense to their budget. Which will have impact on the state budget as well - hundreds of new, small-dollar venues have to get signed up and submit thousands of small sales tax remittances, causing far more strain on the Department of Revenue than if all the stores which already collect and remit sales tax have to recode a set of items in the point of sale systems and registers to collect and remit the tax. Unbelievably short-sighted thinking.— thomast- Two points: (1) maybe in addition to lobbying, state legislators from outside Philly didn't want a tax that would fall overwhelmingly outside the city as a way to pay for the city's wasteful ways; and (2) the Eagles are at least as hazardous as Skoal. How about a beer tax. That's pretty geographically neutral.— kierenmcd
- and how about their brilliant cut to tobacco cessation and prevention? these idiots not only miss a chance to tax all tobacco products like every other state in the nation, but then they go and cut what little funding goes to helping people quit smoking by 50%?! seriously? come on!— bb76
- Why should it surprise anyone....The Governor is shill for the unions and the leeches that work in city hall and in Harrisburg...and he may be a good sports fan but has no leadership abilities.....and republicans may be a joke, but the democrats have been in control in this city and this stae for over 35 years and no matte how you slice it ...their policies have put us wehre we are today......you can't change those facts sheep.......— nuggett
Comment removed.- Comment removed.
- Governor who!!!!!!! It's all organized crime. "Wake up people". Why don't the schmuck tax the Omish that's doing all this construction work outside there so called "private life/community" or whatever the hell it is.— shmuck89
MONEY AND JUSTICE DON'T MIX
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