Revenue Scheme Failing In Pa.
By Leo Knepper
In the search for revenue to cover the General Assembly’s insatiable need for more spending, the legislature looked for new sources of revenue and taxes. Ignoring the $200 million that they borrowed from other funds, the ill-conceived choices they made are already falling through.
Lawmakers thought they had a sure winner when they decided to sell casinos licenses to sell alcohol between 2 a.m. and 6 a.m.; they were wrong. Casinos have scoffed at the $1 million license fee. One casino spokesman stated that they likely wouldn’t take the license if it was free. This lack of interest from casinos for the 24-hour liquor licenses creates an immediate $12 million hole.
The second hole opening up is even more tragic. In their abject greed, the General Assembly levied a 40 percent wholesale tax on electronic cigarette and “vaping” supplies. Adding insult to injury, the new tax applies to merchandise that is already in stock. As one small business owner noted:
“‘It’s almost as if the tax was designed to kill small business,’ said Chris Hughes, owner of Fat Cat Vapor Shop in Montoursville.
“Hughes estimated that he would have to cut the state a $40,000 check for the $100,000 in inventory he currently has on hand.”
Because Mr. Hughes does not have the ability to send the government a $40,000, he is liquidating his inventory and going out of business. Now the state will lose the tax revenue Mr. Hughes’s business was generating and the new taxes the General Assembly had counted on to fill in the budget deficit.
These problems could have been avoided if the legislature and the Governor had made an attempt to rein in spending. Instead, they added to the corporate welfare budget at the expense of small businesses. Now business owners like Mr. Hughes closing shop because of legislative greed.
Mr. Knepper is executive director of Citizens Alliance of Pennsylvania.