A tax by any other name & pot metal

A tax by any other name & pot metal

Now here’s a novel idea: Calling a tax a tax.

 

As part of the continuing push by some Pennsylvania legislators to impose a severance tax on top of the existing impact fee on shale natural gas, a Western Pennsylvania lawmaker is fighting folly with reality.

 

The House Energy Committee, chaired by Rep. John Maher, an Upper St. Clair Republican, voted 15-11 (along party lines) to “rechristen” the five-year-old impact fee as a severance tax, reports the Post-Gazette.

 

Now, before anybody gets all excited, let’s put the proposal into context. Maher’s committee did not vote to send the rechristening amendment to the House floor. And it likely has no legs even if it were. Maher’s intent was to “make it clear that we are, in fact, burdening the industry,” he said.

 

Exactly.

 

Indeed, some might accuse Maher of playing games. But his point should be recognized by those who, unfathomably, conveniently dismiss the import of the impact fee and somehow believe that it’s not a tax at all.

 

But, as the P-G reports it, “Maher said he expects the committee’s move to deflect the immediate push for a stand-alone severance tax bill ‘will permit useful, adult deliberation to proceed’ on the appropriate structure for a shale tax, which he said would be best addressed in legislation that deals with the industry broadly but is not enmeshed in the budget.”

 

Actually, the “appropriate structure for a shale tax” already is in place in the impact fee/tax. It does what it was intended to do –to help alleviate effects of shale gas drilling where drilling occurs, and even shared with areas where there is none.

 

Yes, “useful” and “adult deliberation” is a prudent and necessary thing too often is missing in action in Harrisburg. But this “debate” was settled long ago with the imposition of the impact fee.

 

Here’s a prudent admonition on Pennsylvania efforts, in both Pittsburgh and Philadelphia, to throw multiple millions of dollars at Amazon in hopes of luring the internet giant’s second headquarters.

 

And it comes from a former Amazon executive.

 

As the Post-Gazette reports, James Thomson, now a partner in Utah’s Buy Box Experts, says cities entering the Amazon hunt will have to weigh the cost of incentives ($1 billion or more by some estimates) against the promise of 50,000 supposedly high-paying jobs and up to $5 billion in investment.

 

“The reality is this is a massive beauty contest where the winning city could have a winner’s curse,” Thomson told the newspaper. “It would take a long time to generate back the benefits.”

 

If ever, it must be argued.

 

The P-G also interviewed a principal of a corporate site-selection firm who called Amazon’s second headquarters the “holy grail of economic development.”

 

Which, with some variation, is what the region’s powers that be said about Allegheny Center, publicly subsidized retail in downtown Pittsburgh; PNC Park; Heinz Field; PPG Paints Arena; the North Shore Connector; the billion-dollar Pittsburgh International Airport built to the specs of one airline that later abandoned the facility as a hub (and, now, its $1.1 billion partial replacement 25 years on); and every iteration of every shorter-term enterprise that, at taxpayer expense, occupied the old Volkswagen complex in Westmoreland County.

 

And on and on and on.

 

If only the Regional Renaissance Tax had passed in 1997, Western Pennsylvania would have been set for life, eh?

 

All that glitters is not gold. Experience should tell us that the purveyors of glitter – let’s call them the Government-Political-Foundation Complex – seldom know the difference between gold and pot metal.

 

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).