Analyzing Pennsylvania Gov. Ed Rendell’s Tax Proposals

February 26, 2010

Pennsylvania Gov. Ed Rendell (D) has proposed a budget that seeks to broaden the state’s sales tax while lowering the rate, increase business taxes while modestly lowering the state’s high corporate income tax rate, impose a new severance tax on natural gas, and obtain more federal aid.

In a new report, Director of State Projects Joseph Henchman explains that while some of Rendell’s proposals are moves in the right direction, the budget also boosts spending significantly and relies on one-time money, taxing out-of-state business, and the federal government. Without reprioritizing expenditures, slowing the rate of state spending, and meaningfully addressing the state’s structural deficit, Governor Rendell may have difficulty selling his proposal to legislators and the people of Pennsylvania.

Read Tax Foundation Fiscal Fact, No. 213, “Pennsylvania Governor Proposes Spending Boost, Broader Sales Tax, Heavier Business Taxes.”

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