“Gov. Rendell’s critique of the Commonwealth Foundation’s projections of job losses under his proposed tax increase as ‘ludicrous’ is historically and economically ignorant.
The Governor’s campaign to raise taxes on working Pennsylvanians and small businesses ignores the basic laws of economics. By denying that citizens and businesses would respond to higher taxes, the Governor ignores the fact that people will have less money to spend, and small business owners will have fewer resources to invest in their enterprises.
What is truly ludicrous is that Gov. Rendell ignores the historical evidence that individuals and businesses respond to higher taxes by relocating to states or countries with lower tax rates. This is why Pennsylvania has been one of the largest out-migration states in the nation.
Gov. Rendell’s claim that Pennsylvania has the 2nd lowest income tax rate also distorts the facts in pursuit of his political agenda. Nine states have no income tax, or tax only dividends and interest. Most states have lower starting personal income tax rates, standard deductions, and additional tax credits or deductions. Thus, Pennsylvania ranks much higher in state income tax revenue collected per capita—28th highest, to be exact.
The Governor also conveniently ignores that Pennsylvania has local income taxes which are among the highest in the nation. In terms of state and local income taxes per person, Pennsylvania already ranks 16th highest. Most importantly, when the overall tax burden is considered—including income, corporate, sales and property taxes—Pennsylvania has the 11th highest state and local tax burden in the nation. That makes us already uncompetitive relative to other states, which is why we rank 34th in the nation in job growth under Gov. Rendell’s tenure. Raising or creating new taxes will only make things worse for Pennsylvania.”
The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.