What is the Johnstown Flood Tax? The Johnstown Flood Tax is an 18% tax on all wine and liquor sales in the sate of Pennsylvania. It is a "hidden" tax that is not printed on any receipt of purchase.
How did it come about? As a result of the damage from the 1936 Johnstown, PA flood, the Pennsylvania General Assembly imposed an emergency tax on all alcohol sold in the Commonwealth. The "temporary" 10% tax was initially intended to help pay for clean up, recovery, and assistance to flood victims. Though the recovery was assisted by the federal government and completed within six years of the disaster, the tax was never repealed. The tax was raised to 15% in 1963 and to 18% in 1968, where it stands today.
Where does the tax revenue go? The $200+ million collected annually no longer goes to flood victims. Instead, it goes into the general fund for discretionary use by lawmakers.
A wine educator explains the Johnstown Flood Tax.
Where is the 18% Johnstown Flood Tax on this receipt from a PA wine store? Nowhere! While the 6% sales tax is shown, the Johnstown Flood Tax is hidden in the markup of the wine, so the vast majority of patrons aren’t even aware they’re paying this tax.
Why is this bad? The Johnstown Flood Tax is just one of many prohibitive regulations imposed by the state of Pennsylvania in regards to the purchase, distribution, and sale of liquor in the Commonwealth, which is currently a state-run government monopoly that limits free market choice. It is also a microcosm of a bigger problem with government -- elected officials are quick to levy “temporary” taxes that never seem to go away.
What can be done about it? Please support the effort to abolish the Johnstown Flood Tax and help restore the free market system within Pennsylvania by joining our e-mail list. Submit the form below to receive updates in regards to the effort to oppose this tax. Your information will be kept private and will not be shared with any third parties.
In his book Arguing With Idiots, bestselling author Glenn Beck references the Johnstown Flood Tax as a warning against temporary taxes:
"Since 1936, Pennsylvania has collected over $15.4 billion from this tax. The 2009-10 Pennsylvania Governor's Executive Budget projects this tax will net about $283 million for the state next year alone, from a "temporary" tax originally imposed to pay for $40 million in damages. The lesson should be obvious: Be very careful about giving the government any additional power or authority. No matter how temporary it may seem, it never is."
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