In July, the state Senate narrowly approved a $600 million tax-hike package, raising taxes on home heating, natural gas drilling, electricity, and even cell phone service. The bill comes to $180 per family per year.
If enacted, the tax hikes would cost Pennsylvania families 3,600 jobs, $932 million in disposable income, and $142 million in lost business investment in the first year alone, according to a State Tax Analysis Modeling Program (STAMP) provided by economists at the Beacon Hill Institute.
“Tax hikes don’t happen in a vacuum,” commented Nathan Benefield, vice president and COO for the Commonwealth Foundation. “They have real-life impact, often to a devastating degree.”
The STAMP analysis also showed year-to-year job and income losses Pennsylvanians would experience if the Senate tax hike becomes law.
“Raising taxes to balance a bloated budget is a failed approach,” Benefield continued. “In the past eight years, state government has hiked taxes on Pennsylvanians four times at a cost of $4 billion. Yet, here we are again, listening to the same broken-record claim that tax hikes will fix our budget problem. The problem isn’t too few taxes; it’s too much spending. General Fund spending has increased nearly $3 billion in the past three years—and that’s not even counting spending that has been shifted off-book. Indeed, last year’s spending increase alone totaled $1.9 billion.
“Tax hikes on hardworking Pennsylvanians aren’t the solution to reckless spending. Any proposal that would kill thousands of jobs and cut families’ disposable income should be dead on arrival in the House. Instead, lawmakers must rein in government’s bloated budget before raiding families’ budgets.”
Nathan Benefield and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or firstname.lastname@example.org to schedule an interview.
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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.