BCT Editorial – 7/11/06

This page was last updated on July 11, 2006.

Red herring; Editorial; Beaver County Times; July 11, 2006.

This is the latest in a series of Times editorials telling us Pennsylvania taxes are OK. I believe the most recent are “No excuses” and “Ohio envy” from March 1^st, “Too political” from May 7^th, and “Wrong priority” from May 22^nd. Please read those critiques for my reaction to the Times position.

Below is a detailed critique of the subject editorial.

“Don’t listen to those who blame high taxes for state’s stagnation”

[RWC] A typical response by someone who knows they are wrong. When you know you are right, you invite people to weigh all the facts. You don’t tell them to “Pay no attention to that man behind the curtain. The Great Oz has spoken.”

As I’ve written before, taxes (government spending on the wrong things) are not our only challenge, but claiming taxes are not part of the problem guarantees we’ll never make progress.

“When it comes to taxes, many Pennsylvania residents believe they are overtaxed, when, in truth, they are anything but that.

“Governing magazine’s ‘State & Local Source Book 2006’ illustrates this in a number of revenue ways.

“Let’s look at the revenue that is produced by the big three - the income tax, the sales tax and property taxes.

“For fun, we’re going to throw in Ohio’s numbers as well. Why? Because for some reason, probably because Ohioans get to vote down school levies, many area residents see the Buckeye state as tax heaven.”

[RWC] As I’ve written previously, I don’t care about taxes in Ohio or any other state. If Ohio really were a low tax state, you can bet the Times would have found another state to try and make PA look good. As I’ve noted in previous critiques, the Times believes coming out in the middle of the pack is cause for celebration.

“Using U.S. Census Bureau figures from 2004, Governing magazine ranked Pennsylvania 18th in revenue from state and local income taxes on a per-capita and percentage-of-personal-income basis.

“The combined income taxes broke down to $832 per capita and 2.4 percent of personal income. The national averages were $733 and 2.1 percent. (Because seven states do not levy an income tax, Pennsylvania was only four places from being in the middle of the remaining 43 states.)

“If you lived in Ohio, the per capita rate was $1,064, or 3.3 percent of personal income. That put the Buckeye state No. 7 and No. 4, respectively.

“From a taxpayer point of view, our commonwealth did even better on sales tax revenue. It was 36th on a per-capita basis ($1,042) and 40th based on a percentage of personal income (3.0 percent). The national averages were $1,228 and 3.5 percent.

“Ohio taxpayers also paid more in sales tax revenue. Ohio was 32nd on a per-capita basis ($1,076) and 34th on a percentage-of-personal-income basis (3.3 percent).

“When it came to property taxes, Pennsylvania was 24th on a per-capita basis ($1,010) and 25th when this tax was calculated as a percentage of personal income (2.9 percent). That was still below the national averages of $1,084 and 3.1 percent.

“Ohio did slightly better in this category - 25th per capita ($981) and 22nd percentage of personal income (3.0 percent).

“The two states were fairly close when Governing calculated revenue from fee charges and interest. Our commonwealth was 30th per capita ($1,436) and 34th percentage of personal income (17.4 percent). Ohio was 27th ($1,467) and 44th (15.9 percent) in those respective categories. However, both were below the national averages, which were $1,545 and 18.6 percent.

“There was one tax area where Ohio had a major advantage - corporate income tax revenue. Pennsylvania had the ninth-highest rate in both categories, while Ohio was 21st in the per-capita rankings and 20th in the percentage-of-personal-income rankings.

“When Governing added all the revenue up, Pennsylvania was 20th per capita ($8,249) and 26th percentage of personal income (23.6 percent). The national averages were $8,292 and 23.8 percent.

“And Ohio? It was No. 8 in both categories - $9,204 and 28.3 percent.

“Pennsylvania is not a high-tax state. What it needs is revenue-neutral tax modernization, not anti-tax shibboleths that have little basis in reality.”

[RWC] If you’ve been reading Times editorials on this subject, you know “revenue-neutral tax modernization” is a euphemism for tax shifting.

You also know the Times doesn’t really believe in the “revenue-neutral” part. If it did, how could editorials constantly lobby for more spending on this or that government program? For example, on the same day it published an editorial bashing state Republicans for not cutting state spending, the Times also published “Right moves” that advocated more spending. Spending more and being “revenue-neutral” are mutually exclusive actions if you believe in a balanced budget.

Finally, after using 492 words to tell us why taxes are not contributing to our “state’s stagnation,” the editorial never tells us what is. Anyone want to bet the Times believes more government spending is the answer?