BCT Editorial – 6/2/05

This page was last updated on June 5, 2005.

Tax tip; Editorial; Beaver County Times; June 2, 2005.

Another editorial telling us Pennsylvania taxes are not a problem.

Below is a detailed critique of the subject editorial.

“Never were perception and reality more out of whack than when it comes to taxes and Pennsylvania.

“The most recent IssuesPA/Pew poll found that when the 1,525 adults who were surveyed were asked the open-ended question, ‘What do you think is the most important problem facing Pennsylvania today?’ 20 percent listed taxes as their top concern. Jobs were right behind at 18 percent.

“It all fits into the reputation of Pennsylvania as the Land of Taxes.

“Nothing could be further from the truth, even when it comes to much-hated property taxes.

“According to the Taxpayers Network, Pennsylvania residents paid $888.43 per capita in property taxes in 2001-02, the most recent year from which figures are available. That put the state in 30th place. (No. 1 was where a state didn’t want to be.)

“The Taxpayers Network also calculated state and local sales taxes on a per-capita basis for 2001-02. Pennsylvania residents paid $610.70 per capita, putting it in 37th place.

“By the way, Ohio, where people vote on school district levies, is not the tax heaven or tax haven that so many area residents think it is. The Buckeye State came in at No. 27, averaging $937.50 per capita in property taxes and 31st ($677.05 per capita) in state and local sales taxes.

“And keep in mind that at 3.07 percent, the commonwealth’s income tax is one of the lowest among the states that impose this tax, and that a family of four earning less than $32,000 a year is exempt from paying it.

“Add up all these state and local taxes, and Pennsylvania is not the tax hell that so many people think it is. In fact, the Tax Foundation ranks the commonwealth 35th when it comes to the burden of state and local taxes, averaging $3,747 per capita.

“We’re not picking on Ohio, but at $3,906 per capita, it has the seventh highest state and local tax burden in the nation, according to the Tax Foundation.

“Finally, while the state does need to address certain business taxes that are far too high, the state’s overall business climate is not uncompetitive.

“Pennsylvania ranked 22nd from the top (No. 1 was the best) in the most recent Tax Foundation State Business Tax Climate Index, which measures the impact on business of five major elements of the tax system: the percentage of income taken by all taxes, the individual income tax rates, the corporate income taxes, the sales tax rate and the complexity of the tax system.”

[RWC] We’re #22! Hip, hip, hooray! What’s the prize you receive when you cross the finish line #22?

“Neighboring states ranked as follows: New York (49th), New Jersey (34th), Delaware (18th), Maryland (21st), West Virginia (47th) and Ohio (29th).

“A survey by Ernst & Young ranked Pennsylvania 21, 29, 30 and 33 in four different categories of business taxes, and the Milken Institute ranked the state’s business climate as 20th among the 50 states. (No. 1 was the worst rating).

“Taxes are not holding Pennsylvania back. In terms of business and individual taxes, Pennsylvania is in the middle of the pack.”

[RWC] To save myself the effort of checking the editorial’s alleged facts, let’s assume the author quoted accurate figures and in proper context. Exactly what success should we expect to achieve by being “in the middle of the pack?” I can see the marketing collateral now. “Come to Pennsylvania. Our taxes are average.” How inspiring.

“A major obstacle, though, is a lack of leadership in Harrisburg. The sooner we stop making high taxes our excuse for everything that is wrong, the better it will be for the commonwealth’s future.”

[RWC] Leadership to do what? Times tax editorials usually conclude with the leadership thought, but never attempt to identify the problem areas. Indeed, one goal of the editorials seems to be to convince us that a contributing factor – taxes – to our economic situation is not really a problem at all. If the editorials can rule out taxes as a problem, why can’t the editorials tell us what the problem areas are?