Pa.'s 18% hidden tax was supposed to be temporary ... In 1936

Pa.'s 18% hidden tax was supposed to be temporary ... In 1936

If you've ever paid the "Johnstown Flood Tax," you probably don't know it.

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The "temporary" tax was enacted in 1936 to help victims of the Johnstown flood. In the years immediately following prohibition, it was a 10 percent tax on liquor designed to help a community rebuild, according to a report published by the Pennsylvania Treasury.

Today, that tax is still around, now usually called the "state liquor tax." It's now 18 percent and charged on liquor sold in state-run stores, the only way to buy liquor in Pennsylvania.

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Many consumers in Pennsylvania aren't even aware they're paying the tax, because it's hidden from view — baked into the retail price and not broken out on receipts.

First: The tax worked. It raised $42 million to help rebuild the damaged town by 1942.

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Then, lawmakers made it permanent, nine years after it accomplished its goal. Within two decades, they had also raised it twice, leading it to reach its current level of 18 percent.

Funds raised from the tax do not go to disaster recovery efforts anymore — they're funneled into Pennsylvania's general fund.

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