BCT Editorial – 6/18/10

The title reminds me of a question my parents would ask, “If your friends jumped off a bridge, would you follow them?”  Apparently, the Times would answer “yes.”

While advocating we tax things other states tax, the editorial fails to note where we tax more than other states.  For example, the Pennsylvania corporate net income (CNI) is 9.99% (second highest in the nation) and Pennsylvania is one of a minority of states imposing both CNI and Capital Stock & Franchise taxes.  Pennsylvania and Massachusetts are the only two states that rank in the top 10 for both taxes.

The editorial says, “Pennsylvania desperately needs new sources of revenue, not just to cover the $1 billion hole in next year’s budget but for future expenses as well.  So it would make sense to tap into revenue sources that are already taxed in other states.  But logic means nothing when it comes to the anti-tax mentality that is crippling the General Assembly.”  The Times advocating tax increases?  Gee, who would have guessed?  Other than a tax that may directly impact the Times, it consistently supports just about every proposal for increased or new taxes.  Overspending is the problem, not a lack of revenue.  PA spending has outpaced inflation.  The 2002-2003 budget was $20.7 billion and the proposed 2010-2011 budget is $29 billion.  If spending increases had been limited to the increase of the CPI, the current budget would be about $25.1 billion, and instead of a $1 billion deficit we’d have either a $2.9 billion surplus or lower taxation, and lower taxation favors economic growth.

“In imposing these taxes and dumping the discount, the commonwealth would actually be bringing itself into line with virtually every state in the nation.”  Not exactly.  At 10.2%, 2008 data indicates PA’s state-local tax burden is already tied for ninth highest in the country.  New and/or increased taxes would simply move PA closer to worst place.