Posted on 07/13/2005 3:56:36 AM PDT by Cowman
Drinkers Still Pay Flood Relief Tax Enacted In 1936
POSTED: 1:49 am EDT July 12, 2005 UPDATED: 10:43 am EDT July 12, 2005
LANCASTER, Pa. -- A natural disaster that happened 70 years ago is still taxing Pennsylvania alcohol sales.
That tax is not going anywhere anytime soon.
In March 1936, three days of rain and runoff from melting snow led to the second of three great floods that has hit Johnstown, Pa.
Two dozen people died and the state immediately set out to help the city recover.
That recovery plan involved a 10 percent temporary tax that was placed on the sale of all alcohol in the commonwealth of Pennsylvania. It was only supposed to last a few years. Nearly 70 years later, that tax is still in place and now stands at 18 percent.
Last year, the tax generated a little more than $200 million in revenue, but it's not going any specific place. The money is put into the state's general fund and lawmakers use the money where they see fit.
"It's an onerous tax on wine and spirits in the commonwealth of Pennsylvania that's really outlived its purpose," said Patrick Conway, with the Pennsylvania Restaurant Association.
With restaurants and taverns accounting for one third of all sales to the Liquor Control Board, the Pennsylvania Restaurant Association wants to ax the tax.
"When you look at the record profits that the LCB is generating we think now is the time to act in repealing the Johnstown flood tax," Conway said.
The LCB made close to $400 million in profits last year and lawmakers are starting to notice.
That's part of the reason why Rep. Ron Raymond, the chairman of the House Liquor Committee, is proposing reducing the flood tax by three percentage points per year.
"It's about $10 million per point. It would be a $30 million reduction per year, and my belief is we can make it up in increased sales bringing people back into Pennsylvania, who are now going across the border," Rep. Ron Raymond said.
When you add the 6 percent sales tax, the 18 percent Johnstown flood tax, then the 30 percent LCB markup, the cost of a bottle of wine has now climbed by at least 54 percent.
Other lawmakers want to keep the tax, but dedicate the funds to drug and alcohol prevention programs.
"This is no new taxes, no new money. Just utilizing the liquor tax instead of being dependent each year upon the budget," Sen. Patricia Vance said.
It appears right now that the stream of revenue from the flood tax may not be receding anytime soon.
The property damage total from the 1936 Johnstown flood was $41 million.
The flood tax had generated that much revenue by the end of 1942.
To put this in other words; 'We are going to milk the taxpayer in any way we can so that we can spend and spend and will be percieved an bigger shots than we can ever hope to be.'
Death to the corrupt taxers!!!
...and the excise tax we pay is to finance the Spanish
American war......
Actually the excise tax is to remind you that you own nothing and are only allowed to use and pay for it because the town is gracious enough to let you do so. If you forget this and don't pay tribute to the town they will remove you from your property and replace you with someone who will pay more tribute than you.
at least that is what SCOTUS said
Temporary taxes are as common as temporary death.
Check this out.
"Temporary" tax ping. I know you understand this, but this is why I never vote yes on any new tax. Remember your sister saying the tax for the performing arts center was only going to be temporary. Tell her about this one if she ever says that again. I know I've heard of other examples as well. Seems like there is one on our phone bill from the early 1900's if I'm remembering correctly.
I believe there was a "temporary" tax on gasoline that was supposed to pay the WWI vets their bonus. I'm sure we're still paying it.
Found it. Thought it had something to do with the Spanish-American war:
http://usgovinfo.about.com/od/incometaxandtheirs/a/teletaxrepeal.htm
Bill Would Repeal 107-Year Old Tax on Talking
Telephone tax helped fund Spanish-American War
Dateline: May 2005
U.S. Rep. Gary Miller (R-California) has introduced a bill to repeal a "temporary" tax on talking enacted 107 years ago.
Miller's bill would repeal the 3% federal excise tax on telecommunications established in 1898 as a means of generating revenue to fund U.S. combat efforts in the Spanish-American War.
While the Spanish-American War tax was originally billed as a temporary luxury tax 1898, when only the wealthiest Americans had phones, the telephone is now an essential part of American life. The tax, says Rep. Miller, is therefore highly regressive, as it represents a greater share of the income of poorer Americans.
In 2000, the House of Representatives passed legislation repealing the Spanish-American War tax by a vote of 420-2, and both houses of Congress passed appropriations legislation including the repeal in the same year. President Bill Clinton, however, vetoed the legislation.
“Repealing the Spanish-American War tax is long overdue,” said Grover Norquist of Americans for Tax Reform in a recent press release. “We’ve been stealing money from telephone users for 107 years to fund a war it took us four months to win. Getting rid of this relic is a major priority of the taxpayer movement.”
The tax has its defenders
In January 2005, Congress' Joint Committee on Taxation issued an opinion that the century-old 3% tax might not only be retained, it could also be extended to apply to new technologies like wireless Internet and data connections.
"Cellular phones are being manufactured that may operate using VoIP through Wi-Fi access, as well as through more traditional means," said the tax committee's report. "As voice phone service migrates to using Internet Protocol, there may be no way to distinguish 'packets' of voice and 'packets' of data."
Was it really meant to be a 'temporary' tax?
In 1898, the House Committee on Ways and Means wrote of the Revenue to Meet War Expenditures Act, which originally enacted the 3% tax that, “all of these additional taxes are war taxes, which would be naturally repealed or modified when the necessitates of war and the payment of war expenses have ceased.”
That is exactly the right thing to do.
Around here we have proposition 2 1/2 that was passed in the late seventies and requires the towns to have a referendum vote before they can raise tax rates. The reasoning behind them usually goes something like this:
Hundreds of people a year are killed by Bengal Tiger attacks; Our children are vulnerable to these attacks and we need a Bengal tiger prevention program to be funded by a prop 2 1/2 override.
But there are no Bengal tigers here; they are on the other side of the world?
See how well the program works. Now we need to fund it with a 2 1/2 override.
Good point.
ping
Ping.
Our state liquor system is a sham.
Hell, we still pay a tax on our phone bill to pay for the Spanish American war. And democrats want to increase the tax!!! I haven't seen any news reports lately on how our fight against the Spanish is going. Too much Iraq news. How are our fighting men and women doing in their battle against Spain? I hope we are winning.
Reminds me of the Bear tax on a Simpson's episode.
The mark of good satire is the truth behind it.
Sadly, the overrides are usually approved because they are "for the children."
The court, just like all other government entities, live by feeding at the public trough. They view the taxpayer as something that eats grass and goes moo.
The Johnstown flood. Reminds me of that scene in the film Slapshot with the statue of the dog, who helped save the town from the flood.
"What's up with that dog?????!!"
ping
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