Thursday, June 10, 2010

Man Up?!?

Yesterday, Democratic Governor Ed Rendell stated that the legislature should “man up” and pass tax increases to fill the $1.7 billion hole in the budget.

Opponents of tax Rendell’s proposed $300 million in tax increases say that this will have the inevitably further cripple the economy and raise unemployment. Rendell disagrees.

Where Fast Eddy got his economics degree, we don’t know. The argument that increasing taxes will in any way create jobs or protect jobs (outside of government jobs) is a joke and the same type of thinking that gave us the crap-sandwich a.k.a. stimulus bill.

Rendell’s stewardship of Pennsylvania has lead to increases in taxes, higher unemployment, and a ballooning deficit. Why should anyone trust his leadership now?

There was a great aggregation of studies on taxes. If our elected officials want to actually fix our economy, they should read it.

To summarize, several economists found that:

•Tax cuts boost economic growth more than government spending

• If your goal is to cut a deficit, you must cut taxes and decrease spending, not increase taxes or maintain spending.

• Tax increases hurt economic growth especially if used to maintain government spending.

• Cutting taxes on Corporations boosts economic growth and employee wages

• Tax rates are quickly approaching levels where they are so high that they actually net less money

Rendell’s plan in particular and the Democratic leadership’s plan in general does virtually nothing but raise taxes and fees. They do not substantially cut spending. They do not reform Harrisburg. And, they certainly do not create a pathway for Pennsylvania to begin its economic recovery.

Apparently, Democratic State Representative Kevin Murphy (113th) is taking Democratic Governor Ed Rendell’s advice and “manning up” on a severance tax. He is concerned that these companies are not paying their "fair share." Hey Kev, Pennsylvania has some of the highest and most regressive taxes for business. Everyone in business pays more than their "fair share" as is.

When you compare the proposals to the rhetoric you will see a careful and deliberate attempt to mislead the general public on what Harrisburg intends to do with this money.

First of all, proposals are not all about deep well shale drilling. They want to tax all gas extraction. Even short wells. So, if you have a short well on your farm, you will get pulled into this tax.

As far as what the money will be used for if Rendell has his way, a paltry 10% will be used to offset local problems and environmental concerns. 90% will be used to cover Harrisburg’s pensions and the money that is drying up from the aforementioned crap sandwich a.k.a. stimulus bill. So, the argument that this will be used to protect the environment and improve infrastructure in the host communities is almost (90%) an absolute lie.

If they want to pass a severance tax, 100% should be used to protect the environment, inspect wells, pay for cleanup if accidents occur, remove waste and slurry and improve the infrastructure of the host communities. Why isn’t anyone proposing that?

The answer is quite simple. A severance tax isn’t about cleaning up the environment, improving infrastructure, or regulating drilling. The severance tax is about injecting more money into the mismanagement that governs us in Harrisburg.

How can Kevin Murphy and the other Democratic “leaders” suggest that anything less than 100% of this tax should be used to protect the environment. A mere 10% and the rest should be dumped into a combination of the black hole of Harrisburg wasteful spending and pensions? That is an insult at best, more of the same from Harrisburg at worst.

Educate yourself on these proposals.

If you are concerned about the noble effort of conserving our resources, protecting our environs, and assisting host communities with the burden they bear for having this industry in their community this is not the answer. If Harrisburg wants a severance tax, everyone should demand that it be used for these purposes and for these purposes only.