Debating Taxes on Services - Commonwealth Foundation

The New York Times has a piece on expanding state sales taxes to cover many services, with a specific focus on Pennsylvania. The articles focus primarily on the “modernization” of the tax, without really noting that Rendell’s proposal to tax 74 new items, even with a lower rate, represent a net increase of nearly $1 billion per year. A couple of items worth noting:

Taxes services for businesses (e.g. accounting, advertising, computer programming), may well be double taxation, winding up costing consumers even more:

But even those who agree in principle wrestle with the details. Should a bakery be taxed for the accounting work or lawn care it gets, only to pass along that cost to its customers in the price of cookies? Some in the world of taxes would describe that as pyramiding. And what to do about all the industries that would, naturally, line up for exemptions?

The other is a quote from Gov. Rendell:

“Look, I’m not a crazy tax guy,” Mr. Rendell said.

Here is a (mostly complete) list of taxes Ed Rendell has proposed or supported since taking office:

A natural gas severance tax
An increase in the personal income tax
Another increase to the personal income tax
A tax on companies that don’t provide health care
A tax on companies that do provide health care
A tax on Medicaid MCOs
A tax on slot machines
A tax on video poker
A tax on table games
An electricity tax
An increase to the cigarette tax
Another increase to the cigarette tax
A tax on cigars
A tax on smokeless tobacco
Delaying the phaseout of the capital stock and franchise tax (with a retroactive increase)
Delaying the phaseout of the capital stock and franchise tax (with a retroactive increase) a second time
An expansion of the sales tax
An increase in corporate net income tax collection
A trash tax
A tax on software
A tax on cell phone usage
A tax on oil companies

I’d hate to think of what a “crazy tax guy” would do.