You can deduct occupational taxes as an itemized deduction, misc. deduction subject to the 2% limitation. From Pub 17, page 200:
You can deduct an occupational tax charged at
a flat rate by a locality for the privilege of working
or conducting a business in the locality. If
you are an employee, you can claim occupational
taxes only as a miscellaneous deduction
subject to the 2% limit; you can't claim them as
a deduction for taxes elsewhere on your return.
By the way, while this archaic tax is still on the books in PA, it is rather rare. I've lived in PA for 13 years and do not pay any such tax. A search of this site: http://munstats.pa.gov/Reports/ReportInformation2.aspx?report=taxes_Dyn_Excel
shows relatively few municipalities collect this tax. In my county, only one borough has this tax on the books.
Not sure why this person says it is archaic and not often collected. This tax has been collected every year I have worked for the past 30 plus years. I live in Allegheny County and work in Butler County. Allegheny County has collected this tax for many many years. Butler County did not until around 2009-2010. But now they also collect it, it may be listed as Local Service Tax now.