Working over deadline usually prompts hasty compromises and quick decisions, but Gov. Rendell and the Pennsylvania legislature took their sweet time agreeing on a state budget, which was announced last Friday. As the last state to do so, their “deal-making” is hardly something to applaud. And given the tentative budget’s state sales tax on performing arts, there may soon be even less to applaud in Pennsylvania.
In addition to taxing performing arts — plays, ballets, concerts, museum admissions, zoos, historical sites and parks — the new budget taxes cigarellos for the first time, raises cigarette taxes by 25 cents a pack, takes an additional 2 percent of slot-machine gambling revenue and legalizes table games, like blackjack, poker, craps and roulette.
It makes sense to tax tobacco products and gambling since they are generally seen as “bad.” The idea of a sin tax is certainly not new, and lawmakers obviously relied heavily on that idea.
But here’s the thing: Far from being a societal ill, it’s actually good for people to enjoy the arts. Performing arts and intellectual attractions don’t just promote cultural appreciation — on a more practical level, these activities get people out in the community and allow time with family and friends in some good wholesome fun. And without any tax, it already costs a family of four $66 to see the Philadelphia Zoo. Toss in an 8-percent sales tax, and it would cost the same family $71.28.
Additionally, part of the notion of a sin tax is that people will grumble, but they will still buck up for their nicotine fix or gambling habit. But that’s not necessarily true of an occasional cultural excursion, especially in this economy. According to the National Assembly of State Arts Agencies, states reduced their arts funding this fiscal year by 7 percent on average (The amount of arts funding for Pennsylvania is still undetermined.).
“As a student living on a budget, it’s a wonderful treat to get to see a theatrical or orchestral performance in Philadelphia once in a while,” wrote College senior Esther Burke in an e-mail. “Unfortunately, a tax on those tickets could be the factor that puts them out of my price range.”
To add insult to injury, sporting events and movies are not included under the umbrella of the new tax. Not only do these draw larger audiences, but they are also typically for-profit, making them doubly more resilient than largely nonprofit arts organizations.
Perhaps the most frustrating part of this tax is that there are other, more reasonable products to tax.
Every other state imposes excise taxes on smokeless tobacco, and all but Florida taxes cigars. Furthermore, polls show 7 out of 10 Pennsylvanians support these taxes. Yet cigars and smokeless tobacco are still exempt, as are tobacco and accessories for rolling your own cigarettes.
Another tax that would definitely be more controversial than a tobacco tax, but also more lucrative, is a soda tax. The rationale behind taxing soda is similar to why cigarettes are taxed so unmercilessly. Smoking collectively has a negative impact on public health in just the same way that soda does. Taxpayers end up paying medical costs for obesity and excessive weight through Medicaid and Medicare, so it seems only fair that a tax on sugary beverages could go toward covering state health care costs.
The idea got kicked around briefly at the beginning of the health-reform debate, and some cities are already moving forward with the concept. San Francisco recently implemented a tax on retailers that sell sugary beverages, and New York, while not quite bold enough to implement a tax, rolled out an ad campaign featuring drinks being poured in a glass with fat oozing over the sides. The slogan? “Don’t drink yourself fat.”
These are just a few ideas of other ways Pennsylvania could have raised its tax revenue in a productive way. With so much time and initial gridlock, I’m disappointed our lawmakers weren’t a little more creative.
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