Are Pennsylvania Democrats trying to make our commonwealth the new Hawaii?
Well, unfortunately, we may get our wish, but instead of our rolling hills and beautiful mountains becoming beachfront property with palm trees, we are potentially getting Hawaii’s tax structure that ranks dead last in the nation.
We’ve talked about the Govenor’s egregious budget spending proposal, which eliminates the Commonwealth’s rainy day fund. However, a once obscure proposal in the House may just be the poison pill that fills the revenue gap—one that seems to grow even bigger with each appropriations hearing in the Capitol—and drives even more hardworking citizens from Pennsylvania.
HB 1773, proposed by Representative Chris Rabb, would take direct aim at Main Street by obliterating small businesses and sole proprietors by quadrupuling the tax rate to 12%. This “Fair Share Tax Plan”, as it is so ridiculously titled, would destroy any hope of the American Dream in Pennsylvania, while closing what remaining economic drivers we currently have. There is nothing fair about taking even more from our hard-working neighbors while Pennsylvanians continue to hurt due to the impact of Bidenomics. HB 1773 specifically takes on S corporations which many small business owners use with their LLC, which already take on more scrutiny from the IRS than large C corporations, such as Microsoft, for taxation. It attacks sole proprietors—those who simply receive a check for their work and remit to the government their taxes. In short, this legislation would directly harm thriving small business owners and ensure that they’re taxed to failure.
What the author of this legislation and his cosponsors don’t seem to comprehend is Main Street is not Wall Street. Mom-and-pop shops don’t have the luxury of giving the state more money when they oftentimes can’t pay themselves. Mom-and-pop shops do not have the purchasing power they had just a few short years ago, nor do they have the workforce to help run their businesses. Over and over again we hear of residents fleeing the commonwealth for job opportunities. High tax rates create barriers to business which create barriers to employment. According to the Commonwealth, 1.1 million small businesses operate in Pennsylvania, employing 2.5 million individuals and accounting for 99.6 percent of the businesses in the state. If this bill, or anything of its nature, were to pass, it would have the reverse effect of its stated intent.
This quadrupuling of taxes project a $6.2 billion to $6.6 billion dollar windfall that would only prop up the government for a very short time, because just as they will have exhausted the rainy day fund, an exhausted Main Street will no longer exist.
The concerns for this commonwealth are very real. We have a declining population, an aging population, a contracting economy, bloated pension plans, unfunded liabilities so bad they make our general fund look healthy—the list goes on. Instead of being creative and using free market principles to address our current economic crisis, Harrisburg Democrats are taking cues from economically failing states and attempting to build their tax structure right here in Harrisburg.
What the Democrats cannot bring to Pennsylvania from Hawaii is the tropical beauty and warm weather, so instead they are bringing the Ahola State’s affinity for crushing taxes and high cost of living.
We can, and must, do better. Join us in the fight for a freer Pennsylvania by heading to americansforprosperity.org and taking action today.
This is Emily Greene, Deputy State Director with Americans for Prosperity-PA.