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Opinion: Sales tax holiday proposal fails to tackle real problem

I’m not a fan of gimmicks, and the announcement by state Sen. Lisa Boscola, D-Northampton and Lehigh, advocating for Pennsylvanians to enjoy a two-month “holiday” from paying the state sales tax strikes me as one of those gimmicky proposals that sounds great but does little to solve our underlying problems.

Boscola said she intends to introduce the legislation soon so we will be helped to offset the effects of the highest inflation rates we have experienced in quite a few years. Boscola wants to eliminate the sales tax in June and July, which would divide the lost revenue between two fiscal years. The current fiscal year ends on June 30, the last day the state is to have the 2022-23 budget in place.

This period of high inflation reminds me of the stretch we went through in 1981 when the inflation rate was 10.3%. The average inflation between 1981 and 2022 was 2.79%. In the past several months, it has shot up to about 7% with no signs of relief.

I recall a really big difference between 1981 and now when I took out a certificate of deposit that paid 14.25% interest. I assure you that this is not a typographical error. Today, despite the high inflation, you’re lucky if you can get a certificate that pays 0.5% interest.

I applaud Boscola for wanting to save us some money, but unless you are making a major purchase such as a motor vehicle, the amount you are most likely to save in such a sales tax “holiday” is maybe $100-$200, depending on your spending habits.

No one wants to turn down a free C-note or two, but, realistically, what does it really accomplish in helping us navigate the true problems that high inflation causes for all of us?

“It is pretty clear everyone is hurting from the effects of inflation,” Boscola said when she announced her intention. “Whether you are a teacher, police officer, iron worker, warehouse worker, retiree or recent college grad, everything you need is more expensive.”

She said that she is looking for a way for the state government to provide some temporary relief for everyone without creating a new program or application process. “Price increases are impacting everyone’s bottom line and while state government cannot fix monetary policy or national product shortages, we can find ways to help our families without creating red tape,” Boscola said.

Noting that the annual inflation rate had ballooned to 7.5% in the past month, highest since February 1982, Boscola said any type of relief, even temporary, will be a help.

So where will this lost revenue be coming from? The state is projected to run more than a $2 billion dollar surpluses this year and again next year. “My proposal covers two different fiscal years to ensure that the state remains on sound financial footing,” Boscola said.

I am always leery of what motivates politicians to come up with “giveaway” ideas such as these, especially in an election year. Yes, Boscola is running for re-election, which prompted Republican House leader Kerry Benninghoff of Centre County to suggest that Boscola’s proposal is “probably” tied to her running for re-election.

This type of proposal plays well to constituents. Hey, any time someone wants to hand me a Benjamin - legally - who am I to reject it? Even if this proposal never sees the light of day - and my money says it won’t - Boscola gets good press and some always welcome good vibes from her constituents.

Sen. Mario Scavello, R-Northampton and Monroe, whose district borders Boscola’s, thinks along the lines that I do. He said Boscola’s approach will not solve the main problem of inflation.

Boscola’s proposal follows on the heels of another by Rep. Anthony DeLuca, D-Allegheny, who is advocating for a six-month “holiday” on the state’s 58-cent-a-gallon gas tax.

Gasoline prices have been soaring in recent months, and now with the Ukrainian crisis putting additional pressure on energy costs, the idea of a $4-a-gallon price is a very real possibility, especially in a state such a Pennsylvania, which has the second-highest gasoline tax in the nation.

DeLuca’s proposal is another example of attempting to give temporary relief to beleaguered residents with feel-good measures that have little real lasting impact or effect.

By Bruce Frassinelli | tneditor@tnonline.com

The foregoing opinions do not necessarily reflect the views of the Editorial Board or Times News LLC.