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Pennsylvania Tax Increases Are Not -- And Were Not --
Necessary
Op-Ed by Jeff Piccola (R-15), Senate Majority
Whip
We now know that the 2003 battle between Governor
Rendell and legislative Republicans over increasing taxes proved that
Republicans were right and the Governor was wrong. Recent revenue projections
have shown that Pennsylvania does not -- and did not -- need to increase taxes.
We need to correct that mistake in 2004.
To paraphrase the Governor when he introduced Part I
of his budget last year, I hated the vote to raise taxes with every fiber of my
being. We argued for months with the Governor that the income tax increase was
not needed, that the economy was growing. However, we finally had to exercise
leadership and come to a compromise that would allow our schools to remain open.
Unfortunately, as we are now into our second year of
the Rendell Administration, we continue to struggle with the Governor’s
unnecessary taxes and increases in spending. We need to do a better job of
fighting to keep government out of people’s pockets by ensuring that
Pennsylvania lives within its means so that its taxes are both fair and
reasonable.
Fortunately, Pennsylvania currently benefits from a
$450 million surplus and it is predicted that the surplus will exceed a half
billion dollars by June 30, which marks the end of the fiscal year. These
projections show that we need to seriously consider tax reductions -- both
personal and business tax reductions.
As we prepare to finalize the 2004 -- 2005 state
budget, we need to revisit Pennsylvania’s tax rates. Some of my Senate
colleagues and I have taken efforts to do just this. Recently, Senator Mary Jo
White (R -- Butler, Clarion, Erie, Forest, Venango, and Warren) and I introduced
Senate Bill 1179, which would return the Personal Income Tax rate back to 2.8
percent over the next three years. I was pleased with the support of this
legislation -- we have 20 cosponsors.
Another legislative proposal that would go a long
way to help promote economic growth and job creation by reducing taxes is the
phase out of the Capital Stock and Franchise Tax. Senate Bill 1155, introduced
by the Senate Appropriations Committee Chairman, Senator Bob Thompson (R --
Chester and Montgomery) and which I cosponsored, would accelerate the phase out
of this tax. Pennsylvania is the only state that imposes both a Capital Stock
and Franchise Tax and a Corporate Net Income Tax.
These are the types of initiatives that will help to
spur economic growth and create and retain jobs. Every time money and capital
are taken from taxpayers’ pockets, both jobs and job opportunities are
threatened.
While Pennsylvania’s Governor talks about economic
growth, other states are taking action to spur their growth. Besides increasing
taxes and spending more, the Governor’s other favorite approach is to call for
more borrowing. He seems bound and determined to max out the state’s credit
cards. It’s a funny thing when you borrow money; it has to be paid back -- with
interest.
Over the last 12 months, we have battled with the
Rendell Administration’s obsession over taxes, spending, and borrowing. The
fight is an ongoing one. More needs to be done to curtail the Commonwealth’s
spending and taxing. We need to begin to lower taxes in Pennsylvania.
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