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Earlier today, the Associated Press reported that despite significant political arm-twisting by Pennsylvania Governor Ed Rendell, the state legislature would reject a new tax on cigar and smokeless tobacco sales. Rendell claimed the new tax would help address the state’s multibillion-dollar revenue shortfall.
FreedomWorks opposes tax increases to address budget concerns because it sends the wrong message to politicians. In hard economic times families are forced to cut back and government should do likewise instead of trying to tax their way out of trouble. Tobacco taxes present additional problems since they are relatively easy to evade, extremely regressive, and historically unreliable as a revenue source.
Unfortunately, the Pennsylvania Legislature did approve a tax hike on cigarettes as well as other tax increases for games of chance and tickets for cultural institutions and performing arts events.
FreedomWorks President Matt Kibbe commented, “On behalf of FreedomWorks more than 24,000 members in Pennsylvania, we are pleased to see the legislature reject Governor Rendell’s wrong-headed tax hike on cigars and smokeless tobacco. Instead of looking to raise taxes, Rendell and other big-government advocates should look at ways to cut wasteful spending and reduce costly regulations. While rejecting this tax increase was a step in the right direction, the politicians in Harrisburg did pass other targeted tax hikes and must work harder to hold the line and restrain the growth of government. Doing away with regulatory barriers, cutting taxes and reducing spending are far better ways to build a realistic budget that works for Pennsylvania.”