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.
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