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Issue Analysis

Taxing in a Recession?


Earlier this month, Pennsylvania Governor Ed Rendell proposed new tax increases to shrink the upcoming 1.7 billion dollar budget deficit. Governor Rendell has already resorted to Orwellian tactics. In an effort to collect from people who owe back-taxes, the Governor proposed an amnesty program which reduces the penalties and half the interest will be waived before the June 18th deadline. The State spent three million dollars in advertisements for this program, and the video is ‘Big-Brother-esque’ warning citizens “We know who you are.”

Governor Rendell seeks new taxes on successful Pennsylvanian industries to curtail the 1.7 billion dollar deficit. He is proposing taxes on cigarette companies, which will increase cigarette costs, thus hurting the lower class. However, Rendell isn't stopping there; he is also seeking to raise taxes on the already overtaxed drilling industry. Rendell should know basic economics teaches that in an economic recession one needs to reduce taxes, not raise them.