Why Doesn’t Our State Government Get It?

Picture if you will a typical business in Pennsylvania – it’s owner employs good people and sells a product or provides a quality service that people want.  There are thousands of these types of businesses across our state; and for that matter, across our great country.  These owners are constantly overseeing their revenue streams and expenses to make sure that at the end of the year they’re in the black.  It’s a tough, day-to-day struggle which requires diligent oversight.  In addition, in order to continue to make a profit (or at least break even), the owner needs to plan for the future.  I won’t continue to bore you with my basic outline of Business 101 because I think, like most people, you get it.  So if you can get it, why can’t our legislators and Governor Ed Rendell get it!

For some reason they seem to think that state government shouldn’t be run like a business.  Their retort, “That’s because it isn’t.”  My response, “Why not?  Why shouldn’t our state government operate under the same basic rules of business that I operate under?”

As most of us know, the start of the new fiscal year brought about another budget impasse (for the seventh year in a row).  At this point, the governor and Senate Republicans’ budget proposals are $1.5 billion apart.  Rendell, a Democrat, is proposing more than $2 billion in higher taxes to raise revenue, including a three-year, 16 percent jump in the personal income tax that will take the tax rate from 3.07% to 3.57%.  If passed, this would be one of the largest takes hikes in the nation this year.  Republicans, who control the Senate, firmly oppose any tax increase and are focused on spending cuts that reflect the state’s harsh economic realities.

In the interest of fairness , I guess I need to make a disclosure before I proceed - I’m a Republican.  Not a Rush Limbaugh or Sean Hannity Republican, but a fiscally conservative Republican.  I have always voted for who I believe is the best candidate for the job.  Sometimes that’s a Republican – sometimes that’s a Democrat.  I don’t believe you should blindly vote for someone just because they have an ‘R’ or a ‘D’ behind their name.  The following is Ed Rendell’s commercial, published on YouTube, where he makes his case for a tax increase.

 

 

I have no idea where our governor is getting his information in this commercial where he states that Pennsylvania’s tax structure is one of the lowest in the nation.  At the present time, Pennsylvania ranks 10th nationwide in total tax burden if you combine the percentages of State and Local taxes.  If Rendell’s proposal would go through, we would jump to 5th.  This is pure folly!  PA’s new license plate slogan should be, “Land of the Taxed.”

Our state legislators and governor talk incessantly about job creation and keeping our young, educated graduates at home to create a better Pennsylvania.  Well this certainly is not going to help.  If you pry more money out of the wallets of your residents and business owners, they’ll take their investment capital and businesses somewhere else.  They’ll leave this tax-unfriendly state and move to a more tax-friendly state.  Think it won’t happen?  The American Legislative Exchange Council recently published a paper called, “Rich State, Poor State,” that shows how Americans are more sensitive to high taxes than ever before.  Their findings reflect that the differential between low-tax and high-tax states is widening, meaning that a relocation from high-tax states (i.e. Pennsylvania), to no-income tax states (i.e. Texas or Tennessee), is more financially profitable both in terms of lower tax bills and more job opportunities.

The study found that from 1998 to 2007, more than 1,100 people every day (including Sundays and holidays) moved from high income-tax states and relocated mostly to the tax-haven states with no income tax (i.e. Florida, Nevada, New Hampshire, Texas).  It also found that over these same years, the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.  Coincidence?

Proponents of higher taxes claim that they have to increase or maintain these levels because they don’t want to cut services or jeopardize the education of their young people.  Really?  How about the state of New Hampshire where there is no income or sales tax yet has excellent public services and educational test scores that rank them fourth in the nation.  On the other side of the coin,consider the fiasco of New Jersey.  In the early 1960s, the state had no state income tax and no state sales tax.  It was a rapidly growing state attracting people from everywhere and running budget surpluses.  Today its income and sales taxes are among the highest in the nation yet it suffers from perpetual deficits and its schools rank among the worst in the nation – much worse than those in New Hampshire.  Most of the massive infusion of tax dollars over the past forty years has simply enriched the public-employee unions in the Garden State.  People are fleeing the state in droves.

If you don’t want Pennsylvania to end up at the bottom of the State tax heap, take the time today to send your state representative an e-mail imploring them to find another way to balance the budget other than increasing taxes.

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