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Thank You Governor Corbett
June 10, 2014
The Honorable Tom CorbettGovernor of PennsylvaniaState Capitol BuildingHarrisburg, PA 17120
Dear Governor Corbett:
On behalf of National Taxpayers Union’s 17,300 members in the Keystone State, thank you for your commitment to rejecting tax increases during this month’s budget negotiations. So far, lawmakers have proposed tax hikes on cigarettes, e-cigarettes, and natural gas drilling. If approved, each of these taxes would be detrimental to the overall economy and the everyday lives of Pennsylvanians.
The prospect of a tobacco tax hike is very troubling. According to a 2013 study by NTU’s research arm, revenue projections were met in only 29 of 101 cases where cigarette/tobacco taxes were increased between 2001 and 2011, meaning that 70 percent of the time, revenue estimates were missed. The study also found that during that same time period, 66 out of 96 tobacco tax increases were followed by additional tax hikes. This signals that Pennsylvania could face even higher taxes (not necessarily on tobacco) if the proposed cigarette tax hike comes to fruition.
Our members also hope that you will encourage legislators to oppose additional taxes on e-cigarettes, which have been found to be a safe alternative to tobacco. A recent study by Dr. Joel Nitzkin of the R Street Institute determined that such products can actually reduce the risk of tobacco-related deaths or illnesses by 98 percent or more. By inaccurately treating e-cigarettes as tobacco and imposing an illogical tax rate, many would be priced out of an option that can save lives. Small businesses would also be negatively impacted—particularly the e-cigarette stores opening up throughout Pennsylvania—as consumers are likely to avoid the tax increase by purchasing from out-of-state vendors online.
Finally, our members hope that you will continue to oppose tax hikes and regulations that could cripple the Keystone State’s energy sector. In recent years, natural gas drilling has brought thousands of jobs to Pennsylvania, but there is more work to be done as the state’s unemployment rate remains higher than the national average. Unfairly targeting this industry with higher taxes could have the ill effect of sapping job creation at a time when it is desperately needed.
As summertime budget negotiations heat up, we hope that you will continue to push for fiscal sanity in Harrisburg by resisting tax increases. The false promise of higher revenue collections can be enticing, especially given Pennsylvania’s current budgetary woes. However, our members are counting on you to see through the smoke and mirrors of tobacco, e-cigarette, and energy tax hikes.
Sincerely,Lee SchalkState Government Affairs Manager