PA Chamber Decries Tax Hikes, Inflated State Spending

Friday, July 17, 2009

HARRISBURG, PA – The Pennsylvania Chamber of Business and Industry said the state budget proposal (H.B. 146) advanced by the House of Representatives would harm job creators and families impacted by the recession, and would hinder the Commonwealth’s recovery efforts.

"The last thing Pennsylvania’s job creators and families can afford in this weakened economy is increased government spending and the tax increases that would be required to pay for it," said Gene Barr, PA Chamber vice president of government and public affairs. "Government too must live within its means."

PA Chamber members are particularly concerned about the proposed increase in the Capital Stock and Franchise tax retroactive to 2009.

"Increasing an already uncompetitive tax that is levied on business assets regardless of whether or not that business earned a profit is entirely the wrong thing to do," Barr said, stressing that any change to the CSFT is a tax increase.

Barr said even in this weakened economic climate, other states have taken action to improve their business tax structure, and 33 states have adopted budgets without broad-based tax increases.

"Lawmakers who voted in favor of House Bill 1416 are hindering the ability of the Commonwealth to emerge from this recession in a stronger, more competitive position," he said.

House Bill 1416 also would include a 2 percent tax on virtually all health insurance plans in the Commonwealth, which Barr said will only serve to make health care more expensive at a time when employers and individuals are struggling to afford it.

And in separating out funding for higher education, lawmakers set the stage for a potential increase in the Personal Income Tax sought by the governor, which would hurt small businesses and residents.

"The Senate now has an opportunity to restore fiscal responsibility to this ill-conceived, harmful budget advanced today in the House," Barr said. "On behalf of Pennsylvania’s job creators, the Chamber urges the Senate to reject the careless spending and taxation contained in House Bill 1416."