John Baer: Taxing bubble gum? Now, there's something to chew on

August 26, 2009

CHEW ON THIS: Our "leaders" in Harrisburg are considering taxing gum, candy, chewing tobacco, stogies and more.

Like what? Well, how about basic-cable TV, ATM transactions, legal services or any of a host of things currently tax-exempt such as toothbrushes, flags, twine, airline food, dry cleaning, sports tickets or (gag) newspapers?

I'm not saying that this is going to happen. I'm saying that those fiddling with the stalled budget - the seventh in a row, now 57 days late - say that they're looking at all options to help close a $3 billion-plus deficit.

Story continues below.

Gov. Rendell this week raised the prospect of taxing items currently not subject to the state's 6 percent sales tax. His press secretary, Gary Tuma, yesterday stressed that the Guv won't consider taxing food or clothing but that "other things could be discussed."

I think that puts it mildly.

"We're not going to get out of this without adding some new money," says Philly Democrat Rep. Dwight Evans, a key budget player. "It's just a question of when."

And although Republicans don't support increases in big revenue-producing taxes such as the personal-income tax or sales tax (it appears that Philly will hike its local sales tax from 7 to 8 percent), some of them seem willing to discuss smaller, targeted tax hikes.

When I ask GOP Senate spokesman Eric Arneson if Republicans see a need for new revenue, he says, "We're not there yet."

This, to me, suggests that we're headed there.

If we do hike taxes impacting personal consumption such as on cigarettes, cigars, smokeless tobacco, candy, gum and such, or increase taxes impacting families, such as on realty transfers or inheritance, we could move up the national ladder of most-taxed states.

I'd remind you that Philadelphia already is America's top-taxed city; and when it comes to individuals' taxes, Pennsylvania is no slouch.

Back in March, the business and financial news giant Forbes.com compiled a list of the top-10 states in terms of personal-tax burden, based on U.S. Census data and excluding all but individual taxes.

Pennsylvania ranked 10th, at $2,223 per person.

Forbes says that the high national ranking is due to the state sales tax, income tax and high tobacco, utility and motor-vehicle taxes.

It's partly geo-demographic, too. Six of the 10 states are in the Northeast (Vermont's first, Connecticut third, New Jersey fifth, New York sixth and Massachusetts seventh). Forbes says that this is due to higher incomes and higher property taxes.

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