Pennsylvania's Democratic Gov Catches Sales Tax Cut Fever: Seeks 2-Cent Slash, Sees Boost In Retail Sales

CINCINNATI (TDB) -- A 4 percent statewide sales tax is Gov. Ed Rendell's goal. He is living proof there are Democrats who believe that cutting taxes stokes the economy. Skeptical Ohioans need look no further than next door in Pennsylvania. Currently, that state's sales tax is 6 percent. Rendell said his plan "will mean that Pennsylvania's sales tax rate will be lower than the rates of Ohio and West Virginia." His move comes while there's been talk in Cincinnati of raising Hamilton County's sales tax rate by half a cent -- to 7 cents on a dollar -- to chip away at stadium debts. But Rendell is headed in another direction. He is pushing for the huge sales tax rollback to "boost retail sales and help close future state budget gaps." Rendell once was chairman of the Democratic National Committee. Now he sounds like a Republican. Rendell outlined his plan to a group of suburban Pittsburgh business leaders today:

"My proposal lowers the sales tax, eliminates special interest exemptions on items except necessities like food, clothing and medications, and increases fairness because every item not subject to the sales tax makes the tax on everything else far too high."

He wants to stash revenue generated by the proposed sales tax reduction in a Stimulus Transition Reserve Fund. The fund would be frozen until July 2011 to help cover an estimated $2.3 billion Pennsylvania budget gap expected from the end of federal recovery funding. Some think Rendell has a bait and switch plan. By eliminating some loopholes, he actually brings in more money. But the governor contends his tax cut will stimulate sales.

Pennsylvania's sales tax was adopted in 1953. The original tax applied to nearly all tangible goods. Since that time, 74 categories of goods and services have been exempted. Rendell contends the elimination of sales tax loopholes does not impact average families. Rendell is nearing the end of his second term. He was DNC chairman in 2000, and served as Philadelphia's mayor. His biography is available here.

OH-05 Echo In Virginia? Club For Growth Files Complaint Against Democrat

CINCINNATI (TDB) -- In Ohio, Republican State Rep. Bob Latta has filed a formal complaint with the state elections commission claiming the Club for Growth has distorted his record about raising taxes. In Virginia, the Club for Growth filed a formal complaint the same day alleging "malicious falsification in political advertisements" against a Democratic legislative candidate and the state party.

What ignited that spat? A Democrat's contention the Club for Growth's goal of major tax reforms will eventually lead to a national sales tax of 34%, causing "higher taxes on everything."

Ohio's Latta is being attacked by the Club for Growth, which is backing State Sen. Steve Buehrer in the Nov. 6 GOP primary for the vacant 5th Congressional District, which covers the NW portion of the state. In Virginia, Democrat Chris Brown has recently mailed out two political fliers that contend the Club for Growth is backing an incumbent Republican, Jeff Frederick, who favors the 34% sales tax.

The state Democratic Party financed the mailings. It has the Club for Growth howling that it has been hit with a low blow.

Phillip Rodokanakis, president of the Virginia Club for Growth PAC, filed formal legal complaints Oct. 9 with Virginia's attorney general and the state board of elections, along with local prosecutors in two counties. The full-text of the complaints, plus the fliers that triggered the controversy, are available here. Rodokanakis says:

"Every person who is active in political or grassroots circles knows that the Virginia Club for Growth PAC only promotes and endorses candidates that have taken a pledge in support or lower taxes and smaller government. To suggest otherwise is such an exaggerated folly and no knowledgeable and reasonable person can take it seriously -- it's akin to suggesting that the Pope isn't Catholic.

"The fact that these political mailings were funded by the Democratic Party of Virginia is particularly injurious . . . In other words, this is the second attempt by the Democratic Party of Virginia to malign our PAC and falsify or misrepresent our espoused and well known positions, in an attempt to deceive the voters. This sort of fraudulent campaign activity cannot be permitted to continue if the sanctity of the voting process is to be maintained."

In Ohio, Latta says the Club for Growth is maligning and misrepresenting his well known positions. In Virginia, the Club for Growth says its a victim of the Democrats doing the same thing.