Friday, August 01, 2008

And... Drink Tax

I'll start off by reminding the Friends Against Counter-Productive Taxation (FACT) of a little bit of History. The original Whiskey Rebellion became the first assertion of Federal Authority, and resulted in the US raising a militia about the same size as the entire Revolutionary War Army, ultimately setting a precedent that U.S. citizens who wished to change the law had to do so peacefully through constitutional means. While the tax was repealed in 1803 (having been found noncollectable), it was not the actions of the rebels that really did the tax in.

So, bringing the discussion forward a bit, the current proposal on the table is to replace funds raised from the Drink Tax to fund Public Transit with funds from an increase to the Property Tax, which, as the wags over at the 3rd Avenue Cafe note, is like having your dad beat you with a switch instead of his belt.

But let's think about who gets impacted from both proposals: The Drink Tax basically impacts those that are using public amenities (restaurants, bars, clubs, etc.). I think it would be safe to assume that these folks are a very heterogeneous mix, but are folks, basically, with enough disposable income to waste it on Iron City or invest it wisely in a nice Chateau Lafite '93. Clever folks who don't want to pay the tax can either (A) drink at home or, and this the morally suspect choice, (B) remain sober. My gut feeling is that the people that use public amenities (i.e. "drinkers") are more likely to take advantage of public transit than those that do not use public amenities (i.e. "teetotalers")... or at least they should, considering the legal and moral hazards of DUI.

Again, no proof on that, just a gut read.

Of course, if you go with the Real Estate option, the tax is spread out on homeowners across the county. The approximately 9,500 riders that PAT carries on a daily basis, obviously represent a small subset of those who would be taxes, and there are surely some positive externalities going to non-riders that result from getting drivers off the road and into a bus. Unfortunately, homeowners who ride PAT make up a subset of all riders; renters and students, I'm sure, make up a large bulk of of the passengers. These folk, however, do not pay Real Estate taxes, so they're benefiting at the expense of other residents of Allegheny County. I don't believe that these other residents are going to be none too happy about paying this bill.

Let's set aside the fact that the County Real Estate Assessment System (which generates the base numbers for all the Real Estate Taxes in the County) is FUBAR.

There is a common good associated with Mass Transit: getting folks off the road, reducing energy dependance, encouraging denser development, and so forth. Irrespective of the problems that PAT has encountered over the years, not having viable mass transit would burden the City and the County.


Brother Mouzone said...

The only thing I would add is that increased property taxes on rental properties is generally passed on to the tenant in the form of increased rent, so renters that ride the PAT would be indirectly paying for it, generally speaking.

Anonymous said...

nice post - a few thoughts.

If buses are partly for the drinking crowd, why do they stop running at 1 am? Shouldnt they at least stop running after all the drunkards are safe and home, perhaps 230 or 3?

I don't think 10 percent is such a big deal, but i think uncle Dan would have received slightly less criticism if he didn't jump straight to 10 (which, btw, Dan Frankel promised the day before the budget passed last year that 10 percent wouldnt happen right away).

As a side note that isn't quite an argument for anything, PAT is getting a lot of money from the universities and public schools, which pay a fee much higher than the actual usage by their students. I wonder what would happen if these institutions found a way to bill ridership more effectively, I say PAT would lose quite a subsidy.

Anonymous said...

Only 9,500 riders daily? Based on how rarely I get to sit down, a tenth of them must take the 61c. On most evening rush hours, the bus I'm on gets so full that they leave people on the curb because there isn't even standing room.

Anyway, I agree with your broader point, especially since I own a home and do most of my drinking in it. However, I may still vote against the drink tax. To me, this appears to be a game of political chicken. If the voters don't swerve, will the county or Port Authority find more ways to economize instead of increasing taxes on most of the voters?

Lastly, when dealing with drinking, we should never forget to fight the real enemy: the PLCB.