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It
was as much what Gov. Ed Rendell didn’t say at Kennett High School as what he
did say.
The
Democratic governor, in the last year of his two terms in office, told Kennett
School Board members and a handful of others that the General Assembly in
Harrisburg has the power to bring roughly $1.5 billion into the state coffers
by adopting his proposals for the 2010-2011 state budget.
Mr.
Rendell made five distinct proposals, but one stands out more than the others.
He called for two changes to the state’s sales tax structure. One change was
reducing the tax from 6 percent to 4 percent. Hardly any Pennsylvanian, or
anyone who shops retail in the state, would object to that. There is, however,
another proposed change.
There
are currently 74 exemptions to the sales tax. The most obvious exemptions are
those on food and clothing. But, along with exemptions on pharmaceuticals,
manufacturing and ticket sales by nonprofit organizations, there have also been
exemptions on professional services.
The
governor said his proposal calls for a change to that. Those 74 exemptions
would be dropped to five. Professional fees to lawyers and accountants would be
taxable, he said. What he didn’t make clear was whether fees paid to doctors
would be subject to the tax.
To
quote the governor exactly: “ Everything else is subject to the sales tax.
Lawyers’ fees, accountants’ fees, computer services [would be] subject to the
sales tax.”
That
quote followed his saying that the only food, clothing, pharmaceuticals,
manufacturing and ticket sales by nonprofit organizations would remain exempt.
That could mean people better be prepared to see sales tax added onto their
doctors’ bills and that professionals— lawyers and accountants—must now become
tax collectors.
In
an e-mail to ChaddsFordLive.com, state Sen. Dominic Pileggi, R-9, of Chester
said, “Although the governor proposes taxing all non-prescription drugs and
veterinary fees, it appears that most doctors’ fees would remain exempt.”
We’re
glad to hear that and hope the senator’s interpretation is correct. It’s bad
enough to consider taxing any professional service, but pulling the exemption
from doctor’s bills flies in the face of decency. The governor’s own party is
decrying the high cost of medical care to the point of ramming through a
healthcare bill that might be unconstitutional.
Sen.
Pileggi made another interesting comment on the possible tax change: “ The
governor’s suggestion is actually to dramatically increase the number of items
subject to the sales tax, including caskets, funeral services, textbooks, and
water and sewage services. In total, his proposal would increase state revenue
from the sales tax—so it is properly described as a tax increase.”
We have
no objections to the goal of reducing the sales tax down to 4 percent. Maybe
that will give people less incentive to shop in Delaware where there’s no sales
tax at all. Maybe Pennsylvania should adopt that policy and simply reduce
spending.
However,
dropping the exemptions on professional services is wrong and further blurs the
distinction between public and private business. And a tax on textbooks is
disingenuous coming from a governor who regards himself as an advocate for
education. It’s no wonder the governor didn’t mention that little item while
talking to the crowd at Kennett.
Should
the governor’s pipe dream come before the General Assembly, we urge
representatives and senators to douse it with a bucket of cold water and vote,
“ No.”
There
should be less taxation and less spending.
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