jim haigh posted on 3/18/2010 9:07:00 AM
Nathan, you give another valid reminder of the political machinations of hypocrisy: Simultaneously favoring and bashing so-called "special interests." But I fear that point-well-taken distracts from a major distinction at the heart of sales tax expansion: New Taxes versus Removal of Exemptions.

The plain truth remains that most of what are being called "exemptions" are not exemptions. These diverse lines of enterprise were never intended for taxation - and were never actually taxed. Painting over New Taxes with the Exemption Brush is a powerful use of language, and an anchor for Gov. Rendell's (and proponents) misleading messaging on SUT Expansion.

His traveling circus onboard Commonwealth One pulled into Allentown the other Saturday, touting substantive local achievements in education to a small, cherry-picked group of educators, parents and students. His press release and companion fact sheet stated: "When Pennsylvania's sales tax was adopted in 1953, the levy applied to nearly all tangible goods except basic necessities. Since that time, certain goods and services have been exempted because of high-powered lobbying by special interests."

That deceptive leap from "all...goods" to "goods and services" artfully bundles all 74 into a rewrite of history, suggesting the never-taxed onto the books back in 1953. The success of the second false frame: All these "special interests" lobbied over time for their individual, greedy little carve-outs, aka "exemptions," depends on the first frame being swallowed whole.

The article you cite finally gets this right, but versions of this "fact sheet" quote have been getting treatment as facts -- without quotes -- in statewide coverage and conversation. And what is getting inserted between quotation marks are the 2nd layer of faux paint: Powerful, folksy anecdotes the Gov delivers to the justifiably concerned audience. Flavor from Roosevelt Elementary: "Guess the salmon farmers didn't have as good a lobbyist as the trout farmers," "you'd think with all their oil money, that country could afford a little tax on a few helicopters," "does anyone in this audience even know a professional seller or buyer of gold bullion?"

In reality, the same bucket first brought out for his budget address only has a handful of red herrings, but they set the hook for: "None of it makes any sense." Which is deceitful nonsense. The economics of never-intended-to-be-taxed that factored in 1953 are all the more critical in 2010. Computer services have the Maryland case study, advertising has Florida. As for the latter, a new tax would not only be a first for our Commonwealth, it would be a first in the Nation. And as I detail here, the unintended consequence of looking at critical services as economically static piggy-banks to raid, will ultimately lead to increased SUT and PIT deficits: http://bit.ly/c8yhFs

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