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A classic con game

Published October 08. 2011 09:01AM

I had the pleasure of doing the Reader's Turn this week and I realized the question's details required more background on my part so I could answer the possible inquiries it could generate. If you look back or ahead to the Reader's Turn on the Spotlight Page and read the question it will help you with what I'm writing.

Thanks for coming back. The major questions some people to whom I posed this "Turn" really dealt with their lack of knowledge about what the "Johnstown Flood Tax" is and what it has to do with liquor. In fairness to those of you reading the question as well as the many who have no idea about this issue, I would like to provide some background. This is not an encylopedic explanation just my understanding of the tax, its implications and its misuse in my opinion.

As most of you know, the Johnstown Flood was devestating destroying the entire town in 1889 and killing 2,209 people. The flood was caused by the failure of the South Forks Dam after a drenching six to ten inch rainstorm inundated Lake Conemaugh which was a resort for western Pennsylvania industrialists. Despite desperate attempts to save the dam which was questionably maintained to begin with and open a blocked spillway on it, the dam burst and flooded the villages and towns downstream including Johnstown. The people really didn't have a chance and those that failed to realize what was happening were swept away. To add insult to injury the debris carried by the flood waters ended up creating a makeshift dam under Stone Bridge downstream sending the wall of water back at Johnstown and trapping those who were caught in the flood waters at the bridge where the debris ended up catching fire killing several more people.

When the catastrophic events concluded, well over 2,000 people died within one hour of the infamous dam burst. While this first dam was the most historically notable due to it being the worst catastrophe in US History at the time and was the largest loss of life in a natural disaster in our nation's history, the flood tax actually originated with the March 1936 flood.

The 1936 flood which affected western Pennsylvania including Johnstown and Pittsburgh resulted in the implementation of the "Johnstown Flood Tax". This levy passed by the PA General Assembly was meant to be an emergency tax raised on the sales of alcohol in the Commonwealth for the purpose of providing flood relief for this flood. The levy was 10 percent and was expressly intended for flood cleanup, recovery and rebuilding after this flood, a task which was accomplished in a few years.

One would think that with the purpose of the tax accomplished, the assembly would have done the honorable thing and repealed this tax, but governments both state and Federal apparently do not have very long memories and as a result instead of repealing the tax, the legislature in 1951 made the tax permanent. This tax created for disaster relief became an additional tax to fill the coffers of the state for lawmakers to spend as they see fit. To add insult to injury, this fund. which could have been used all these years for emergencies, was in essence squandered in the general fund. What's worse is the government wasn't happy with 10 percent above the 6 percent sales tax they already collected so in 1963, they increased the tax to 15 percent followed by a second increase in 1968 to 18 percent. To add to the insult, these political hacks still call this tax the "Johnstown Flood Tax".

What does this mean? This means that you pay 24 percent tax for every bottle of alcohol you purchase in this state and that money to the tune of $200 million dollars is wasted by lawmakers however they see fit. If we generously give them 20 years to have paid for the flood it was meant for that means starting in 1956 until today, this state would have had a fund containing in excess of several billion dollars for disaster relief, but instead this money was squandered in the general fund not unlike the Federal government has done to another tax we call Social Security.

In my not so humble opinion, this is a classic con game for which most of us would end up in jail, but a lack of oversight by voters who couldn't be bothered to vote out of office those who play games like this with our tax dollars coupled with the lack of voter memory has encouraged lawmakers to re-appropriate money from us time and again from its original purposes and into other areas for which the money was not intended.

This is why we must remain vigilant and not blindly trust the government to do the right thing because it is too tempting to our leaders to take advantage of the trust and corrupt the best of intentions. It is their responsibility to lead, but it is our responsibility to keep them accountable. There should be no argument. If a lawmaker proposes that a flood tax be returned to flood relief, then it should be done without reservation. If the assembly cannot find it in its heart to do so, then the voters should find it in their hearts to elect new leaders who can.

Til next time…

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