Jobs being lost because the Onorato drink tax. 30 bars down how many more to go? (Butler: restaurants, prices)

[gg]

Allegheny County drink tax controversy
In late 2007 Allegheny County received permission from the Pennsylvania General Assembly to pursue increased taxation of poured alcohol and rental cars to subsidize the Port Authority of Allegheny County.[10] Members of the Allegheny County Council and Onorato believed that such a tax was preferable to increasing county property taxes. After the 10% tax on poured alcohol passed, Allegheny County bar and restaurant owners protested the new tax, claiming that it would hurt that business.[11] A lawsuit by the bar and restaurant owners challenging the legality of the drink tax was thrown out by the courts, but they sought a referendum overturning the tax in the November 2008 general election.[12] Onorato subsequently withheld the funds raised by the drink tax from the Port Authority, demanding that the transit agency first restructure its labor costs.[13]

[sskink]

Pittsburgh, Pennsylvania -- In mid 2007, Allegheny County chief executive Dan Onorato was faced with a dilemma. In the county budget, the Port Authority of Allegheny County faced a $30 million dollar deficit. This $30 million was necessary because to get matching funds from the state, the county would have to fill in this hole immediately. Many ideas were bantered about to raise revenue. Onorato traveled to Harrisburg to lobby for state approval for the ideas. The state, though, only approved two options. These were the two options that Philadelphia got when they did the same thing. The first was a tax of 10% placed on the price of poured alcoholic beverages and a $2 per day increase on car rentals inside allegheny county. The other option was a slight increase in the county property tax that averaged out to around the area of $50 dollars. Despite fierce resistance from the local bar and restaurant association and patrons of different establishments, the county went with the drink tax option and the motion passed in December 2007 with a 11-4 vote.(All 10 Democratic and one Republican councilpeople voted for the tax).


More:

Whiskey Rebellion II | News | Pittsburgh City Paper


FTA:

According to Evanto, the county executive did propose alternatives to the drink and car-rental taxes, including a tax on nonprofits and an income tax. But the state left the county with just three options: property tax, drink tax and car-rental tax.


"It wasn't so much that we wanted [the drink and car-rental taxes]," Evanto says. "That's all Harrisburg gave us. It wasn't our intention to target the restaurant industry."


Some say Port Authority and county fiscal irresponsibility are to blame for the new taxes.


"Our government has let the Port Authority get completely out of control," says Dr. Jake Haulk, president of the Allegheny Institute for Public Policy. "Wasteful spending is the problem."


Onorato himself doesn't deny that Port Authority spending is out of control. In fact, Onorato has promised to withhold the tax revenues from the Port Authority if the transit union fails to make cuts and get its operating costs under control.

[Clint.]

Does Allegheny Institute for Public Policy ever find a problem in which the culprit is not wasteful government spending, or where the solution is anything but tax cuts?

I don't know why the CP even bothered asking for their opinion, or why anyone bothers to solicit opinions about this without first framing the question to establish that legacy costs cannot be addressed at the local level, so unless their proposal is to seek action by state legislature to address perceived out of control spending on past contracts, they should restrict their analysis to current operating costs and current contract terms and what funds are needed to provide high level of service to users based on the current operating costs.

That is too complex of a question for a general public that expects simple A vs. B choices to simple questions, though...and it is still biased by begging the question that the problem lies in "wasteful spending" instead of "adequate funding". Or the implicit assumption that public transit should be disproportionately lower than public funding of highway infrastructure, etc.

[greg42]

I had a beer at a brewpub in Harrisburg last night, and it didn't have any tax on it at all. So this leads me to believe that if it were not for this county tax a poured beer at a bar has no tax on it at all. So while it's a disadvantage compared to surrounding counties, this is a weird little loophole apparently of sales tax law, kind of like how there's so little or no tax on smokeless tobacco and cigars compared to cigarettes.

I'm more pissed about the rental car tax.

[Moby Hick]

You guys make Chris create graphs.

Nullspace

[Pghuser]

Originally Posted by Moby Hick

Exactly. While the tax isn't at all what I would choose to tax, it's just like sales tax. The store collects it but it was never there money. The extra tax hits all bars equally and if some don't pay it, that's not fair to the rest of them.

It's not like people are going who live in Brookline are going to drive to another county to save a few cents.

[Pghuser]

Originally Posted by bradjl2009

If they would just pay the tax like they're supposed to and not keep the money they collect from it for themselves there wouldn't be any problem. I could care less about the stupid drink tax becuase it won't stop me from going to a bar at all. My friends and I all pretty much all of drinking age now and none us have ever said we're not going out becuase of the drink tax.

EXACTLY. They collected the tax and didn't turn it over. This wasn't money out of their pockets. The tax is passed on to consumers who obviously had no problem paying it.

[Pghuser]

Originally Posted by h_curtis

Bars come and go? Lots of these bars have been around for generations. Taxing an industry that is as tough as that one was wrong and jobs indeed are lost due to that taxation that went after one industry. What did that taxation do for PAT? That is what that idiot Onorato told everyone. This 10% tax on one industry will fix up PAT.

Whoa. Wait.

You are totally missing the point. These places COLLECTED the money. They COLLECTED THE MONEY. All that they had to do was turn it over to Allegheny County like they were supposed to. Obviously the bar patrons didn't mind paying the extra dimes on their drink or there would have been $0.00 to turn over to the county. These places aren't closing just because of the drink tax. The tax is uniformly collected across the board. It's not like the bar patrons can go down the street to avoid paying the extra dimes on their $1.00 brew. No one has stopped going out or stopped drinking because of this tax. Whether the tax is fair or not is another issue. The bottom line is that these places aren't closing just because of the drink tax. If they weren't getting customers there would be nothing to be turned over.

[UKyank]

Originally Posted by greg42

I had a beer at a brewpub in Harrisburg last night, and it didn't have any tax on it at all. So this leads me to believe that if it were not for this county tax a poured beer at a bar has no tax on it at all. So while it's a disadvantage compared to surrounding counties, this is a weird little loophole apparently of sales tax law, kind of like how there's so little or no tax on smokeless tobacco and cigars compared to cigarettes.

Technically the alcohol is taxed when the bar/pub purchases it from the wholesalers and pays the tax on the purchase then (unlike a restuarant that buys food products and pays no tax as food is tax free - you pay the tax when it is made and served to you at the restuarant). The allegheny county tax is an additional tax on top of the tax that was already paid when the alcohol was purchased.

[greg42]

Originally Posted by UKyank

Technically the alcohol is taxed when the bar/pub purchases it from the wholesalers and pays the tax on the purchase then (unlike a restuarant that buys food products and pays no tax as food is tax free - you pay the tax when it is made and served to you at the restuarant). The allegheny county tax is an additional tax on top of the tax that was already paid when the alcohol was purchased.

That's weird. Guessing it relates to the ridiculous way alcohol is treated in this state. I find it rather odd to create a scenario where the food part of your dinner tab has sales tax and the alcohol part does not. I admit to not really paying attention to this on a combined check. (True even in Allegheny County by the way! The tax has no bearing on whether I'm buying a drink or not. Although I remember a couple places noting the tax as "Onorato Tax" on their receipts, LOL.) But what happened last night is we got a beer at the bar while waiting for a table. So I had to pay for those separately and I noticed there was not tax.

What's odd is not that food is non-taxable to the restaurant purchasing it. That would be normal in a transaction where you're buying raw materials for a finished product or buying stock for retail sale, so nothing weird there. I work in a business where we buy items that would be sales taxable for an end user but we don't pay sales tax on it. When we sell it, we collect sales tax. What is weird is if the retailer is paying SALES tax and the end user is not paying SALES tax. Very strange if this is the case for beer here!

BTW what if they make the beer? I was at Appalachian Brewing Co. They make the beer not buy it so where is the tax? Maybe they have to create a BS wholesale transaction because of this?

I know when I buy a case at a distributor they do collect regular sales tax. I don't remember what happens when I buy a six-pack at Giant Eagle or Whole Foods. In theory along this line, they have already paid the sales tax to the distributor so there's no tax at the register?