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Recent Research
OCTOBER 17, 2011 | Testimony by NATHAN BENEFIELD
Inheritance Tax Reform
Testimony of Nathan A. Benefield, Director of Policy Analysis, Commonwealth Foundation for Public Policy Alternatives, Pennsylvania House Finance Committee
JUNE 7, 2011 | Commentary by KATRINA CURRIE
The Real Victims of a Severance Tax
Jim VanBlarcom, a busy Bradford County dairy farmer, set a work day aside to come to Harrisburg and tell his story to Gov. Tom Corbett's Marcellus Shale panel. Royalty money from leasing farmland helped him double his dairy herd size, and he's glad the industry's here.
MAY 11, 2011 | Infographic by COMMONWEALTH FOUNDATION
Natural Gas Tax for Smarties
Not sure if Pennsylvania should enact a unique and extra tax on Natural gas? here are some important things you need to know!
Recent Blog Posts
FEBRUARY 8, 2012
Senate Votes on Natural Gas Tax (HB1950)
On Tuesday, February 7, 2012, the Pennsylvania Senate passed HB 1950 Conference Committee Report by a 31-19 margin with 26 Republicans and 5 Democrats FOR it and 4 Republicans and 15 Democrats AGAINST it.
| Alloway (R) | Y | Kasunic (D) | Y | Washington (D) | N |
| Argall (R) | Y | Kitchen (D) | N | Waugh (R) | Y |
| Baker, L (R) | N | Leach (D) | N | White, D (R) | Y |
| Blake (D) | N | McIlhinney (R) | Y | White, M (R) | Y |
| Boscola (D) | N | Mensch (R) | Y | Williams (D) | Y |
| Brewster (D) | N | Orie (R) | N | Wozniak (D) | Y |
| Browne (R) | Y | Piccola (R) | Y | Yaw (R) | Y |
| Brubaker (R) | Y | Pileggi (R) | Y | Yudichak (D) | N |
| Corman (R) | Y | Pippy (R) | Y | ||
| Costa (D) | N | Rafferty (R) | Y | ||
| Dinniman (D) | N | Robbins (R) | Y | ||
| Earll (R) | Y | Scarnati (R) | Y | ||
| Eichelberger (R) | N | Schwank (D) | N | ||
| Erickson (R) | Y | Smucker (R) | Y | ||
| Farnese (D) | N | Solobay (D) | Y | ||
| Ferlo (D) | N | Stack (D) | N | ||
| Folmer (R) | Y | Tartaglione (D) | N | ||
| Fontana (D) | N | Tomlinson (R) | Y | ||
| Gordner (R) | Y | Vance (R) | N | ||
| Greenleaf (R) | Y | Vogel (R) | Y | ||
| Hughes (D) | Y | Ward (R) | Y |
posted by COMMONWEALTH FOUNDATION | 01:18 PM | 0 comment
FEBRUARY 8, 2012
Don't Feed the Sharks!
Many Republicans, who once opposed raising taxes, are justifying their anticipated vote to increase taxes on the natural gas industry (it's not a FEE to pay for uncompensated costs...something we support) by claiming that if they don't vote for this now, the tax will only get worse.
We heard this before when Republicans helped Ed Rendell pass a 10% increase in the Personal Income Tax in 2003. How'd that work for them? They ended up passing even more taxes in the following years!
So, Don't Feed the Sharks! The tax will never be enough. The idea you are "getting it done" is wrong. You won't be done at all as the tax-eaters will be back again next year looking for another increase!
Take, for example, the following taxes that were supposed to "get it done" but have only skyrocketed!
- The state Sales & Use Tax first appeared in 1954 at the rate of 1%, but increased by 500% over the next 14 years to its current rate of 6%.
- Lawmakers then added the Capital Stock and Franchise Tax in 1968, as consumers started complaining about increases in the sales tax, then doubled its rate over the next 14 years.
- Policymakers added the Personal Income Tax in 1971 at the rate of 2.3%, which has increased 35% since then, to its current rate of 3.07%.
- State government also implemented the Inheritance Tax in 1971 which began taxing the estates of the recently deceased.
- In 2002, the state began taxing cell phone use for the first time under the Gross Receipts Tax and increased the Cigarette Tax by over 300%.
- In 2009, Governor Rendell got yet another increase of the Cigarette Tax.
Don't Feed the Sharks!
posted by MATTHEW BROUILLETTE | 01:15 PM | 0 comment
DECEMBER 30, 2011
PA Online Sales Tax Guidelines Claim First Casualty
When the Pennsylvania Department of Revenue issued a new bulletin instructing online vendors about collecting state sales tax, tax reform advocates expressed a lot of concern. The new guidelines were intended to clarify existing law, but still leave a lot of things unclear, and room for the department's judgment of "nexus."
Following the new directive, at least one online retailer has cut off all Pennsylvania ties. The online store ThinkGeek.com told the Commonwealth Foundation that "we did recently terminate our PA Affiliate Relationships based on the recent PA tax legislation" [though there was no legislation].
This means less revenue for Pennsylvania residents who sell or advertise with the site.
Federal courts have ruled that states can only require businesses with a "nexus" in the state to collect sales tax from shoppers, based on the Interstate Commerce clause. Residents are still responsible for the "use tax" on goods they buy out of state. While state law has always had broad definition of "nexus," going beyond simply having a physical presence, the new memo implies that almost any connection -- including advertising on Pennsylvania-based web sites -- could subject a company to state law.
Recently states have tried to go after Internet-only retailers to collect more revenue. Often this comes in the form of "Amazon taxes," targeted at Amazon.com, the largest online retailer, though the company on average represents a small portion of online sales. In fact, Amazon has come up with a new strategy to profit off of state efforts -- offering to serve as "tax collector" for other retailers for a fee.
But other retailers, particular smaller ones, will face significant compliance costs to figure out which of the more than 8,000 sales tax rates across the country to charge each user. And Amazon taxes have backfired in other states, resulting in online retailers dropping all local ties and pulling out of the state, and frequently fail to generate significant revenue.
Background Info:
- In recent Congressional Testimony, Joe Henchman of the Tax Foundation discusses the issue of online retailers and sales tax compliance.
- Tax Foundation Special Report on Amazon Taxes.
- Wall Street Journal debate on taxing online retailers.
- Mercatus Backgrounder on The Internet, Sales Taxes, and Tax Competition.
- ATR Policy Brief on Internet and e-Commerce Taxation.
posted by NATHAN BENEFIELD | 00:33 PM | 0 comment
