Family ties can bind us together across any cultural or class boundary. Maintaining and promoting them should be our first priority. But while politicians routinely give lip service to helping families like yours and mine prosper, I’ve found that their solutions often do more harm than good.
In April, Gov. Wolf crisscrossed the state on a “Jobs that Pay” tour saying his record-setting tax-and-spend budget proposal will boost economic growth. Today, a new, nonpartisan study says even more harm could be done to middle class families: 30,000 jobs will not be created next year if Wolf’s plan is passed.
The Commonwealth Foundation worked with the Beacon Hill Institute at Suffolk University to apply an economic modeling program to analyze the overall impact of Gov. Wolf’s proposals. Economists at Beacon Hill developed the Pennsylvania State Tax Analysis Modeling Program (PA STAMP) to calculate the impact of Gov. Wolf’s tax proposals on job creation. As a result of Wolf’s tax increases, 29,408 jobs will not be created in 2015-16.
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If Gov. Wolf succeeds in raising Pennsylvania’s personal income tax from 3.07 percent to 3.30 percent (an increase of 7.5 percent in the rate), what will be the impact on job creation? Over 6,500 jobs that would have otherwise been created will not exist.
In collaboration with economists at Suffolk University’s Beacon Hill Institute, CF used an economic modeling program—Pennsylvania State Tax Analysis Modeling Program (PA STAMP)—to analyze the impact of Wolf’s tax proposals on job growth. And the projection for Wolf’s most recent scheme is not pretty for working families in the commonwealth.
Worse, the 7.5 percent increase in the income tax rate accounts for merely half of the revenue expected to be extracted from taxpayers—from a myriad of still-evolving tax increases—in the most recent tax hike proposal. The 6,500 job loss projection does not account for potential tax hikes on movie tickets, digital downloads, businesses filing fees, bank shares, lottery winnings, and cigarettes.
Let your representative and senator know Pennsylvanians can't afford higher taxes. Too many jobs are at stake.
Given the rumblings of an imminent vote on higher income taxes, it's important to remember what happened 12 years ago (nearly to the day!) with our state budget.
Ed Rendell was governor. Republicans controlled the House (108-95) and Senate (28-22). Republicans passed a no-tax-increase budget in early 2003 and were poised to reject job-crushing tax hikes. The governor had line-item vetoed education spending and was holding kids’ education hostage to get his tax increases. Sound familiar?
Gov. Rendell had demanded a 30 percent increase in the Personal Income Tax. I vividly remember Senate leaders in mid-November as they declared their steadfast resolve to not vote for higher taxes. Many expected the House and Senate would hold the line on tax increases. The public was with them!
But then, just before Christmas, the dam burst. 30 Republican representatives and 14 Republican senators–against the will of the majority of their majority–joined with enough Democrats to pass a 10 percent increase in income taxes. Governor Rendell signed the bill on December 23, 2003.
The borrowing of billions followed quickly in 2004, with massive spending increases each year thereafter.
Much has changed since Rendell’s first year in office. Over 76 percent of the House and Senate has turned over. The Republican majority is the largest in 60 years. What hasn't changed, however, are the forces that profit from Big Government: the government unions, which remain as powerful and wealthy as ever before.
And yet here we are today. Will the legislature agree to massive tax hikes without meaningful pension or liquor reforms?
Will 2015 be a repeat of 2003?
Gov. Wolf’s year-long pursuit of higher taxes shouldn’t end like Gov. Rendell’s. History doesn’t need to repeat itself.
At the beginning of 2015, we heard a lot about a "fresh start" for Pennsylvania. But nine months later, it's difficult to identify anything fresh about Gov. Wolf's tax, borrow and spend plan.
In fact, Philadelphia Daily News columnist John Baer pointed out that every Pennsylvania governor since the 1970s has raised taxes. Reading that, I naturally thought, “Yeah, well maybe we should stop doing that.”
Some Democrats argue that tax increases are part of responsible governing, noting that every governor elected since the '70s - Milton Shapp, Dick Thornburgh, Bob Casey, Tom Ridge, Ed Rendell, Tom Corbett - raised taxes (the argument is Corbett's fuels-tax hike for $2.3 billion in road and bridge repairs counts).
But Republicans say maybe that's the problem. Maybe the state's economy would be better with lower taxes.
Nate Benefield, of the conservative Commonwealth Foundation, makes the case against raising taxes: "Overall, our tax burden has gone up, and yet we have stagnant growth, among the slowest in the country."
Pennsylvania's ranking in state and local tax burden, according to the respected D.C.-based Tax Foundation, is 10th heaviest among states and third heaviest among the most populous states, behind New York and California.
In other words, for 45 years Pennsylvania politicians have been raising taxes—resulting in anemic job growth, income growth and population growth.
- Since 1970, spending has increase by an inflation-adjusted $13,800 per family of four, or $3,450 more per resident.
- As a result, Pennsylvanians labor under the 10th highest tax burden in the country, up from 20th in 1977 and 25th in 1991.
- From 1970 to 2014, Pennsylvania has ranked a dismal 49th in job growth, 45th in personal income growth, and 48th in population growth.
Ironically,Gov. Tom Wolf suggests his $4.6 billion, $1,400 per family of four tax increase represents a new way of doing things in Harrisburg. Raising taxes to historic highs, while rejecting real pension reform or liquor privatization, isn't fresh or innovative. It's the same thing we’ve been doing for decades.
It’s time we stop repeating the same failed mistakes of the past.