Tax Plan Vote

To:       Pennsylvania House of Representatives, all members

From:   David N. Taylor, President
             Carl A. Marrara, Vice President of Government Affairs

RE:      Tax Plan Vote

On Monday, Governor Wolf said that you, the members of the General Assembly, should vote for his historically large broad-based tax increase to prove your patriotism and civic pride. We ask that you honor those same noble instincts by voting to reject this tax hike; a proposal crafted to loot the commonwealth’s individual and small business taxpayers – a proposal where everyone will pay more.

This debate has gone on for far too long, and the vote on Wednesday will show the true colors of Pennsylvania’s electorate. You, the members of the General Assembly will vote in the best interest of your constituents, and that’s why we are confident this proposal will fail – and rightfully so. Pennsylvania’s taxpayers simply can’t afford to pay more. Once the governor’s largest-in-the-nation tax hike is dispatched, Pennsylvania’s elected officials can work toward a sensible budget with no new taxes or tax increases.

Although this proposal differs from the governor’s March budget address, the effects would be equally damaging to our citizens and to our economy. Recent analysis has shown, “In total, Wolf's tax hike would take $1.8 billion more from taxpayers for this fiscal year, and $3.2 billion more next year, after all taxes have taken effect. That represents an increase of more than $1,000 per family of four.” Study after study has shown that businesses are more adversely affected by sales tax increases and expansions than individuals are. Governor Wolf’s plan to expand sales taxes would make Pennsylvania even less competitive. (More here: Can You Afford $1,000 More? And here: What’s Wrong With Taxing Business Services?)

Additionally, more than 75 percent of all businesses in our commonwealth are small businesses filing taxes at the PIT rate – a rate that would increase by 14 percent under the Governor’s plan. This is an additional 14 percent of revenue that cannot be reinvested into expanding, hiring, or increasing benefits for the many employees of small businesses throughout our commonwealth. The effects would be powerfully negative. (More here: PA Answers the Governor)

Placing additional taxes on natural gas extraction is irresponsible given the existing impact fee, our corporate tax structure, and current market conditions. Manufacturers, employers, and families depend on affordable and reliable energy to sustain their way of life. If we want to get the most out of the natural gas industry and all the tax revenue that will result from it we must let the industry grow – not punish it with a specific punitive tariff. And to tax what’s becoming a successful industry in its infancy in order to subsidize the alternative energy industry is foolhardy. Pennsylvania realized minimal results from “investing” more than $550 million into solar and wind projects, not to mention additional billions from the federal “stimulus”. The truth is that the abundance of natural gas has lowered energy prices for industrial and residential users while simultaneously lowering CO2 emissions. Instead of finding ways to drive this industry out of our commonwealth, we ought to be asking how to optimize conditions for growth. (More here: Broken Promises of Green Energy Programs)

Governor Wolf has threatened to cut social services and school funding if his tax proposal is denied by the General Assembly. This threat is wrongheaded since the budget passed in June increased funds, across the board, for social services and education. It’s clear that the choice is NOT between a broad-based tax increase or funding cuts. Education funding has risen every year over the last four without a single tax increase. Today, Pennsylvania spends more on education than in the entire history of our commonwealth; ranking 10th in the nation in per-pupil spending. There are ways to improve educational efficiencies and effectiveness: pension reform, prevailing wage reform, stopping unfunded mandates, improving classroom evaluations, increasing access to school choice, and many other needed reforms would be a good place to start. (More here: Education Funding In Pennsylvania: Myth Versus Fact)

Let’s help our economy grow, let’s inspire industry, and let’s pass a responsible budget with no new taxes or tax increases. Patriotism and civic pride demand it!