Governor Ed Rendell to PA businesses: get out!

PA has new creative ways to get rid of businesses, people

First off, let me say the area around Lancaster and York Counties in Pennsylvania is beautiful, crime is low, and you can still safely turn your back on most folks. I love the area. It is in the Bible belt. We may have invented the Bible belt. The people are conservative and honest, hard-working, and the number one cause of death is OD’ing on scrapple and shoe-fly pie. People die content and a near-record number go to heaven.

But is Pennsylvania business-friendly?

Well, imagine receiving this notice from the Department of revenues of your state about a new tax few outside of government have ever heard of:

“PA Department of Revenues records indicate your company has not reported or remitted Use Tax in the previous three years. Your company incurs a Use Tax liability when purchases are not taxed by the selling vendor…”

Sounds like you’ve been a negligent business person, right? So then why didn’t my tax accountant know, who is himself a government auditor?

Answer: no one knew. And they weren’t supposed to. It’s that old taxation without notification. The Department admits in that same notification:

“Many businesses are first made aware of Use Tax when a Department auditor reviews their financial records, and a tax assessment including penalty and interest results.”

Translation: Governor Ed Rendell’s Department of Revenue admits it failed to properly announce this Use Tax in time and most are surprised by it. So how can a government levy a tax and then, the first year it is enforced, demand payment of “back taxes”?

Technically, the DOR had said, back in 2006, at their web site, which no one was, or is, obliged to visit:

 “The DOR has now moved on to the enforcement phase of the program, while the education and outreach phase continues.  In January 2006, self-audit Use Tax Returns were mailed to PA businesses, permitting them to audit their books for 2006, as well as the previous three (3) years, to determine any use tax liabilities.”

The letter, which is part of a “voluntary compliance program” (ve have our vays), ends with a friendly reminder that failure to pay could lead to jail. Thank you and have a nice day.

Use tax? As far as anyone in PA can remember, Use Tax was devised to scrape a few tax dollars from out-of-staters who worked in PA. They were using the state to pursue gainful employment, and hence, theoretically, were putting wear and tear on the highways and using our public services, and had to pay their “fair share” – 6% of their earnings. It had nothing to do with items purchased out of state.

Maybe the notices were supposed to go out, but the fact is, many businesses did not receive word of this creative new interpretation of the Use Tax, at least not in understandable enough terms, before now. My own accountant – who had never mentioned this to me, through no fault of his own, because his own colleagues didn’t know either – just told me today that the mailings from the Department to his clients started about a month ago, which was as much a surprise to them as mine was to me when it arrived yesterday. Other PA colleagues I checked with have not yet received notice. But we will all be paying “back” taxes on a new tax no one knew they were supposed to pay 3 years ago, and many will pay hefty penalties for not paying now that credit is tight and businesses are faltering!

In fact, so stealthy was the assault on PA businesses that as soon as the terrifying notices went out, a new web site opened up to discuss the new compliance initiative and how to deal with it. Obviously, the site visitors didn’t know what had hit them either!

And guess how much time Ed Rendell’s sweethearts are giving us to make the necessary calculations from 3 years of tax returns and send in a check for the last 3 years’ tax liability? Until January 15, about a month, to get the credit needed to pay this potentially crushing amount – just in time for Christmas (let them eat scrapple, eh, Ed?) and for the credit crunch. Clearly they are hoping many will not be able to pay by then and will incur juicy late fees to help bolster big spender Governor Ed Rendell’s treasury.

But would I bother to warn you about this if Pennsylvania were otherwise a business-friendly state?

Maybe not.

But there is that other little matter of the order to reduce electrical power output, imposed on utilities in PA. That’s right. No matter how many new residents PA acquires in the next few years (the government is friendly to illegal immigrants, of course), the overall power output will decrease. It has to. Otherwise the power companies pay a hefty fine. Sure, it’s their fault you moved here. How dare they?

So how does a power company go about refusing you power? Who goes first? Are hospitals exempted? How about the elderly? Do they freeze in the winter and gasp in the summer? Does anyone care for people any more? Well, as the Dems would say: the environment was here first (interpretation: get lost, humans!).

As one blog poster commented: “forget about electric cars because they will need places to plug them in to recharge the batteries.”
The post ends with the words: “Rendell, you are an idiot! The loonies are running the asylum!”

My advice to you if you live in PA or are considering starting a business here: you may want to check around first for a more business-friendly and people-friendly venue –  say, Venezuela.

The roots of anti-energy madness

The roots of anti-energy madness

By Donald Hank

 The Madwoman: What are they looking for? Did they lose something?

Pierre: They’re looking for oil.

The Madwoman: Strange! What do they want to make with it?

Pierre: The things people make with oil. Misery. War. Ugliness. A miserable world.

These lines are the most frequently quoted by literature critics writing about the famous play “La folle de Chaillot” (The Madwoman of Chaillot), written by Jean Giraudoux in 1944. Since the late 40s the play has been a constant favorite throughout Europe and on college campuses in the US. For example, an early reference to a US production of the play goes back to 1958 (at MIT). In 1969, an English-language adaptation was made into a movie starring Katherine Hepburn. till going strong, it was staged, for example, at Knox College last year and at the Ojai Community Theater in Ventura County, CA, just this year.

In the play, the Madwoman (Countess Aurelia) and her friends, all street people, discover that a group of rich investors have discovered oil under the streets of Paris and have contrived to lay claim to it without the knowledge or consent of the Parisians. In the end, Aurelia and her co-conspirators trick the investors to enter her home as a kind of promotional event.  The investors are then permanently barricaded inside and hence prevented from doing further harm.

The above lines from the play best reflect the Left’s visceral reaction to the oil industry and the attitudes behind their energy hatred.

Proof that the play is still prized as an anti-oil propaganda piece, and not merely as ars gratia artis (art for its own sake), is a review of the above-mentioned recent staging appearing in the Ventura County Star under the title line “Madwoman uses wit to skewer the rich,” in which we read:

Venture capitalists trample over the poor.

Oil fuels war. Greed is good.

Snatched from today’s headlines? Well, maybe, but those themes are also central to “The Madwoman of Chaillot,” Jean Giraudoux’s fanciful satire written in 1944 while his beloved France was under Nazi occupation, then staged a year later after his death at age 62. Giraudoux wrote many colorful and witty works, but “Madwoman” stands out for its wisdom and timeliness, then and now.

Accordingly, for the Left, oil and the greedy oil tycoons are synonymous with misery, war and ugliness, while the energy-hating Left is portrayed as wise and ever timely.  Further, the above-cited trite lines, which we are never allowed to forget, and are touted as “wit,” enshrine the idea of oil as an evil tool in the hands of the rich. It is in large part this irrational perception on the part of madmen, as fancifully reflected by a Parisian playwright in the last century, that today prompts the Left in Congress to reject drilling for oil, building refineries, or making travel affordable in America and elsewhere. As usual, it is the rich snobs of far-left academe and Hollywood who support an idea that ultimately deprives the poor and middle class of a decent standard of living, all the while hypocritically blaming other rich people – those who earn their wealth on the free market – for somehow causing their misery. For them, Giraudoux’s play is a kind of religious canon and as such obviates any further rationale for the ideas it represents. Lucky for them.

Like the Madwoman of Chaillot, today’s Left in Congress, while fueling one economic crisis after another, manage to cast themselves in the role of saviors while making the capitalists who supply us with ever scarcer but desperately needed energy look like villains. A perfect example is the call for greater windfall profit taxes on oil companies.

But are the battle lines for vs against affordable energy really so clearly marked out that we can unequivocally blame the Left for the mess we’re in?

A recent article by Paul Weyrich leaves little doubt that they are.  Quoting figures submitted by Representative Roy Blunt, Weyrich shows, for example, that:

“… for the past 14 years, 91% of House Republicans voted to develop oil at ANWR while 86% of Democrats opposed drilling there…” 

 Other categories from Weyrich’s article:

Coal liquefaction: 78% of Democrats opposed vs 97% of Republicans in favor.

Oil exploration of Outer Continental Shelf: 81% of House Republicans “yes,” 83% of House Democrats “no.”

Increased refinery capacity: 97% of House Republicans “yes,” 96% of House Democrats “no.”

Development of oil and gas reserves: 91% of Republicans “yes,” 86% of Democrats “no.”

By refusing to allow oil drilling in ANWR and off-shore, shale oil exploitation, or construction of nuclear power plants or new refineries, and through various efforts to tax energy, such as proposals to slap “carbon footprint” taxes on frequent flyers and big-car owners, or by intricate schemes of enforced purchase of carbon credits, the Left, in tandem with OPEC, has managed to impoverish the entire world within about the space of a year, severely reducing the size of the middle class everywhere. To add insult to injury, the greens’ insistence on converting corn, sugar cane and other staple crops into fuel (as though the burning of ethanol did not produce CO2!) has helped create a worldwide crisis in food prices.

None of these untoward side effects of their snake oil remedies faze the Left, who continue to steadfastly blame economic woes on the free-market suppliers of goods rather than on manipulators in government who throttle the trade in those goods by enacting a maze of often contradictory regulations, blocking exploitation of energy sources and imposing new tax burdens on already-dear energy.

As for “The Madwoman of Chaillot,” if an acquaintance should happen to enthusiastically mention having seen this play somewhere, be sure to ask:

Did you ride to the theater on your bike or did you walk?


Airlines united behind questionable economics. TAKE ACTION

Airlines united behind questionable economics

by Donald Hank

We urge our readers to go to the site linked below and leave a post asking why the members of the airline-supported forum StopOilSpeculationNow are so preoccupied with only one minor aspect of the fuel price crisis, namely, speculation in the prices.

Tell them ending speculation will not help extract desperately needed oil from US territory where it lies going to waste. Tell them it will not help build much-needed domestic refining capacity.

This forum StopOilSpeculationNow is taking the viewpoint that the market must be brought under government control, something the Democrats will agree with, but is ignoring the common sense viewpoint and the facts: nuclear power would conserve fossil fuel by supplanting oil-burning power generation, drilling for oil in US territory and exploiting shale oil deposits would counterbalance the effects of the OPEC monopoly, and building refineries here would make us less dependent on other nations and reduce the price of refined petroleum products. The proposed “carbon footprint” tax would have additional disastrous effects on the airline industry, but their execs ignore this problem.

By pretending that the entire problem is due to a minor factor that requires government control of the economy, StopOilSpeculationNow is clearly playing politics. Indeed the current administration must take much of the blame for the oil crisis, but not so much for its failure to stop speculation but rather because it fails to let the free market sort out the problem free of excessive and often self-contradictory environmental concerns. Indeed, the US, while refusing to exploit off-shore oil on the pretext of environmental concerns, has lodged no protest against foreign oil companies who explore for oil off our shores (e.g., the Gulf of Mexico). In fact, if China succeeds in finding oil there, with its deplorable record on the environment, we are sure to see much more pollution than if US companies had been allowed to exploit these deposits.


On July 9, 2008, I received a letter from Delta Airlines urging me to join in a political action aimed at motivating Congress to stop oil speculation, which, according to the letter, is driving up the price of oil as much as $30 to $60 a barrel. These figures were supposedly based on analyses by “market experts.”

I was surprised to learn this and am as concerned as the next guy about anything that makes oil more expensive. Nor do I have any sympathy for speculators. If speculation is indeed driving up oil prices as much as $30-60 a barrel, the government may be justified in taking a position on this.

But I was put off by the fact that there was no mention of anything but a regulatory solution to a free market problem, particularly at a time when our government refuses to drill for oil in our territory or build more refineries, and by the lack of supporting details such as the names of the scholars behind the studies showing this and references to them.

I went to the web site linked in the letter and found that almost every major airline was supporting this anti-speculation action.

But I was shocked that not one of the CEOs who had signed the letter was interested in any solution other than adding a new regulation to stop speculation. There was no mention of drilling for US oil or building more refining capacity or lowering energy taxes and opposing the foolish “carbon footprint” taxes that have been proposed. A recent article by Paul Weyrich shows that every avenue for increasing US oil independence has been blocked by Democrats in Congress, whose “no” votes make up as much as 97% of all Democrat votes, whereas the Republican situation is the exact inverse. Further, some oil experts insist that speculation is not really a major culprit.

But besides that, how could the US government stop speculation when much of it is under foreign jurisdiction? Oh, that’s right. We are moving toward a one-world government that can fix everything.

At any rate, all of the above makes me very suspicious about these airline CEOs’ motivation.

It was a surrealistic experience to see the entire air travel industry lined up behind a proposal for more regulation rather than less. It appears, at leasst on the surface, as if the entire industry is in the hands of Democrats who are opposed to a free market solution and who are trying to make free market actors look like the sole cause of our current economic malaise while giving anti-energy politicians a pass. This is not all that surprising when you consider how American Airlines benefitted from millions of dollars in corporate welfare after the 911 attacks.

But add this to the fact that CEOs of major industries like McDonald’s and Ford have foolishly supported gay sex and same sex “marriage,” and it is easy to see that our economy is far from being in the hands of grassroots Americans.

Here is the letter:


Hello Mr. Hank,

Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now.

For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers.

Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.

The nation needs to pull together to reform the oil markets and solve this growing problem.

We need your help. Get more information and contact Congress by visiting