Pennsylvania Approves Slot-Machines for Property Tax Cut

Creative budgeting took an interesting twist in Pennsylvania when the state legislature agreed to fund a $1 billion property tax cut by allowing as many as 61,000 slot machines to operate in the state. Democratic Governor Ed Rendell insisted on the slots-for-tax-cuts deal as part of the state's $23 billion budget. He deserves praise for a 4.3% spending increase with no tax increase, but the gambling deal is unhealthy.

Social libertarians and other grownups have no quarrel with gambling. As sins go, if indeed it is one, it is rather minor. There are those compulsive individuals who can't handle it, and they merit support, sympathy and help. However, there is no reason for gambling to be illegal when the New York Stock Exchange operates in the open.

What is worrying about the Pennsylvania deal is more fundamental. Taxes are those fees members of a free society pay for the privilege of being free. No one likes paying taxes, but they are cheaper in the end that a collapse of the government. The reduction in taxes in Pennsylvania in exchange for revenue from gambling puts the state in a business that has proved time and again to be better run for private gain. Moreover, the state now has a vested interest in ensuring that people gamble. In a moral sense, it is one thing for the state to permit an activity and quite another to benefit from it -- the playing field is notlevel when the state gains.

Do property owners deserve a tax cut in Pennsylvania? Maybe, or maybe they need an increase. The question is too complex to answer here. The point is that the state has opted to reduce taxes in exchange for getting into the gambling industry, and it is hard to argue on the one hand that the state is too intrusive when it levies a property tax but is not too intrusive when it operates or regulates and taxes 61,000 slot machines that heretofore did not exist.

Were the revenue replaced by new car sales by operatives of the state, one might hear complaints from car dealers. If Pennsylvania launched a pizza delivery service in its larger cities to replace the revenue, there would have been screaming from restaurateurs. The role of the state is not to engage in business but to provide those goods and services that are necessary to a free society that the market cannot delivery.


© Copyright 2004 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.


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