Politics & Policy

In Perspective: Dan Onorato and Tom Corbett on Taxes and Fees

Tom Corbett and Dan Onorato have sought to make job creation the central narrative in a heady campaign season, but for months now they’ve enjoyed nipping at each other’s heels over tax pledges and promises.

The latest round is underway, with Democrat Onorato alleging that Corbett has already broken his “no tax increases” pledge, signed with Americans for Tax Reform in February. Corbett has said he would be willing to increase the state-mandated unemployment compensation fee paid by both employers and employees.

The unemployment compensation fund is running a multi-billion dollar deficit at present.

“Well, let’s talk about [the] unemployment [compensation fee]. It is a contribution. Not a tax,” Corbett told folks at a campaign stop in Pittsburgh.

Corbett is apparently casting his lot with the “user fee” crowd, those who argue that not all mandatory citizen-to-government payments constitute “taxes,” but merely “user fees” paid for specific services. But this line of thinking has always been picayune, and the refuge of politicians seeking to hedge on debates over the extent of taxes.

Fees, after all, are typically understood as the result of a voluntary, market choice. Tolls are one example, where one can opt-out by avoiding toll roads. In that sense, tolls are a specific class of voluntary tax — a user fee.

An unemployment-compensation contribution, withdrawn directly and automatically from paychecks and employers, on the other hand, is not something from which one can opt-out. It’s a tax.

So while Tom Corbett’s lawyerly distinction could maintain his “no tax increases” pledge, it’s troubling to see the way he qualifies his position. 

Onorato, for his part, is no better. Unlike Corbett, Onorato wants to tax Marcellus Shale extraction — which Corbett wants to avoid for now — and also would be open to increasing unemployment-compensation taxes.

For these reasons, Corbett remains the obvious choice on the tax issue. Corbett’s hedging is less worrisome than his opponent’s open calls for taxes on a still growing industry.

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