Day by Day

Saturday, September 20, 2003

No temporary tax is really temporary.

As anyone who has ever comparison-shopped across state lines knows, just the opposite is true. Our state liquor monopoly buys low and sells high. So where is all that profit going?

Much of it is soaked up by the Johnstown Flood Tax, passed by the legislature in 1936 to rebuild the western Pennsylvania town after a devastating - though not nearly as deadly as the infamous flood of 1889 - deluge earlier that year. The flood waters receded 67 years ago, but the tax is still at high tide.

As I reported yesterday, the 'temporary' tax, which over the decades grew from 10 percent to 18 percent, has become a giant, invisible revenue stream, pouring more than $171 million into state coffers in 2001-02 alone. With flood relief long over, the money is earmarked for nothing in particular; it simply helps the state pay its bills on the backs of State Store customers.
Philadelphia Inquirer | 09/16/2003 | John Grogan | Time to speak up on high liquor tax

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