PoliticalAction.com Blog

PA already has 28th highest personal income tax collection per capita in the nation

HARRISBURG, PA — In response to Gov. Ed Rendell’s proposed 16% increase in the Personal Income Tax, the Commonwealth Foundation projected the economic impact of taking an additional $1.5 billion out of the private sector.

“Today Gov. Rendell revealed that he cares more about growing government than ensuring Pennsylvanians have good-paying jobs,” said Matthew Brouillette, president and CEO of the Commonwealth Foundation. “As every respected economist knows, a recession is the worst time to increase taxes. Doing so now would add thousands more Pennsylvanians to the unemployed ranks.”

Using the Pennsylvania State Tax Analysis Modeling Program (PA-STAMP), an economic modeling program developed by the Beacon Hill Institute at Suffolk University, the Commonwealth Foundation projects that a 16% increase in the PIT (from a rate of 3.07% to 3.57%) would result in 23,960 fewer jobs next year.

Effect of Tax Changes on PA Jobs
Projected Jobs 2009-10
0.5% PIT Increase 1% PIT Increase 2% PIT Increase
Latest Estimates 5,156,122 5,156,122 5,156,122
With tax change 5,132,162 5,108,489 5,061,631
Effect of Tax Change -23,960 -47,633 -94,491
Sources: Governor’s Executive Budget, Beacon Hill Institute

“Rendell’s desire to extract more than $4.5 billion out of the economy over the next three years is a continuation of the same failed economic strategy of trying to tax and spend our way to prosperity,” said Brouillette. “Despite increasing state government spending by more than double the rate of inflation, Pennsylvania’s economic growth lags the national average and ranks among the worst in the nation.

Does Gov. Rendell really believe that more of the same will cure our economic ills?”

Brouillette said that Gov. Rendell’s argument that we can “afford” a personal income tax increase because we have the second lowest rate among the 43 states that impose such a tax is misleading. “According to the Tax Foundation, the same source cited by the Governor, Pennsylvania has the 28th highest personal income tax collection per capita,” he said. “In other words, while our rate may be amongst the lowest, the amount the state takes from working Pennsylvanians is far higher than the Governor suggests.”

The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.

“Furthermore,” Brouillette said, “We need to look at the overall burden on taxpayers. Pennsylvanians shoulder the 11th highest state and local tax burden in the nation. So a PIT increase is hardly as innocuous as the Governor would suggest. In fact, it would be downright destructive to our ability to recover from this economic downturn.”

Last week, Maine’s House passed LD 1159 without objection and the Senate later passed it by a vote of 25 to 10. The bill was Passed To Be Enacted by the House and Senate this week. LD 1159 would establish a licensing regime for farming industrial hemp. Maine previously passed a study bill and has defined industrial hemp in the law.

The State of Oregon is also on the verge of passing industrial hemp legislation. If the Oregon bill succeeds it would join fifteen others that have passed hemp bills.

As many of you know, since 1937, this highly versatile crop (uses include food, fuel, building material, textile, and energy to name a few) has been linked — via the Marijuana Tax Act — to the recreational and medicinal strains of the same species: Cannabis sativa L. But make no mistake, they are genetically distinct and nothing like the other.

The battle has been long. The last legal hemp crop grown in the U.S. was harvested 50 years ago. In 1970, with the passage of the Controlled Substances Act, farming hemp in the U.S. was effectively outlawed. And since then, the courts have offered no relief claiming only Congress can change the status quo.

Nonetheless, with the hemp renaissance’s onset in the 80s — and the 90s when states began introducing hemp legislation — grassroots efforts have led to a growing hemp ground swell headed straight towards D.C.

As farmers find themselves mired in the effects of the Great Recession, common sense dictates legal barriers be removed to allow U.S. farmers to add this cash crop to their increasingly limited options as have virtually all other industrialized nations.

Earlier this month, our new drug czar, Gil Kerlikowske, told the Wall Street Journal that the War on Drugs was on its way out. Using this logic, the end of the ludicrous U.S. ban on hemp farming is a no brainer.

Sadly, most elected officials inside the beltway have bought into the “hemp is marijuana” paradigm and have become afraid of their own shadows on this issue. Rep. Ron Paul repeatedly introduces hemp legislation only to be denied a committee hearing in the House.

Gratefully, state legislatures have been willing to step in and lead the way. The tipping point appears near. All that’s needed now is for the Obama Administration to take simple measures leaving it to the states to determine their own fate regarding industrial hemp. Yes, the ban on U.S. hemp farming draws near — thanks in no small part to federalism. Please make a donation today to our General Fund to help us continue our work and bring hemp farming back to its rightful place in America.

Sincerely,

Patrick Goggin
Vote Hemp Director