PITTSBURGH — With TV cameras in tow, Channel 11 stopped at our
restaurant last Tuesday to ask the afternoon kitchen crew how it
felt about the new $52 occupation tax. Not surprisingly, no one
liked it.
Also not surprisingly, not much of the half-hour of filming
ended up on TV, just a few seconds — a quick sentence about how
it’s already hard for some people to make ends meet, even without
another tax hike.
What ended up on the cutting room floor was another comment,
more macro in nature — the idea that more taxes will only put old
and staggering Pittsburgh into a deeper economic hole, and that the
right way to get more money for cops and roads is through business
growth, i.e., through lower taxes and fewer barriers to
entrepreneurship, the exact opposite of what our politicians are
doing.
Unfortunately, the guy at the restaurant who made that last
comment understands more about economics than the bulk of our local
and state politicians. All told, our politicos have done just the
right things to put Pennsylvania and Pittsburgh at the top of the
pile in red tape and taxation and at the bottom of the pile in
economic growth and job creation.
It’s Economics 101. Increase the price of shirts, and you’ll
sell fewer shirts; raise the cost of living and the price of doing
business, and you’ll attract less investment, create fewer jobs and
shrink the population.
“It doesn’t take training in economics to understand that when
larger and larger amounts of capital are annually removed from the
private sector by state and local governments, families are left
with fewer dollars to spend on their needs, and businesses have
fewer resources for investment and job creation,” says Grant
Gulibon, senior policy analyst at the Commonwealth Foundation in
Harrisburg. “Year after year of massive budget increases makes
clear that Pennsylvania’s overall tax system is not designed to
promote optimal economic growth and prosperity, but to simply
generate the maximum possible amount of revenue for government to
spend.”
Measured over the past 15 years, state spending in Pennsylvania
expanded at nearly triple the rate of inflation. Regrettably, in
terms of our competitive position in attracting new investment or
keeping more money in our take-home pays, that’s not normal. In the
1990s, only one state in the nation had a higher rate of growth in
government spending per capita than Pennsylvania.
Calculated in terms of “economic freedom,” a recent study by
Forbes magazine and the Pacific Research Institute (“U.S.
Economic Freedom Index: 2004”) ranked Pennsylvania 45th out of the
50 states. That means we’re bringing up the rear when it comes to
fiscal mismanagement by the state, bloated public-sector
bureaucracies, excessive regulation, ill-conceived income
redistribution schemes, judicial overreach and confiscatory
taxation.
And, conversely, the 45th-place ranking says we’re at the front
of the parade when it comes to having an overstock of politicians
who are exceptionally proficient at coming up with new ways to pick
our pockets. What’s now on the agenda in Harrisburg is another hike
in the gas tax, on top of the Jan. 1 increase that made
Pennsylvania’s level of taxation on gasoline the second-highest in
the nation.
In any case, to put things in perspective when money goes from
private wallets to the public pot, here’s how I see it. On the
private side, I see a lot of people who work hard for eight or 10
hours a day, for not spectacular wages, minimum or no health care
coverage, and not much in the way of any buildup of money for
retirement. And on the “public servant” side, there’s a news report
from the National Taxpayers Union on former Senate Democratic
leader Tom Daschle’s retirement package that I saw on the same day
that Channel 11 was asking the dishwashers and cooks about the $52
that’ll be deducted from their paychecks.
Daschle, defeated in November’s elections, pocketed $175,000 per
year in taxpayers’ dollars as party leader. This year, he’ll
collect $121,233 in pension money, and then another $5 million or
so in pension dollars over his expected lifetime for his monkeying
around in the House and Senate for 26 years.
Now I know that the $52 from the kitchen guys is supposed to go
for cops and firetrucks, but I can’t help dividing it. Daschle’s $5
million equals $52 from the paychecks of 96,154 hardworking
people.
