By closing these loopholes, we can broaden the base of the state sales tax and actually reduce it from 6% to 4%. Let me put it another way: my proposal will cut the sales tax statewide for every Pennsylvanian by one-third.
The sales tax today is a testament to the power of lobbyists and special interests. There is little rhyme or reason why we tax some items or services and wholly exempt others, except that in years past someone lobbied to secure favored treatment for themselves. My proposal calls for the elimination of these loopholes so that everyone pays his or her fair share of the sales tax.
In 2007, Nevada's economy began a downturn which I knew was not temporary. The Executive Budget I prepared in January of 2009 scaled back state government to weather this crisis. More importantly, the balanced budget I submitted imposed no new taxes and allowed no expansion of state government. The Nevada Legislature disregarded my solution. They raised taxes one billion dollars, and they made government bigger. They made the wrong call. I vetoed their new taxes and their inflated spending. I thought it was wrong then. I KNOW it's wrong now. I planned responsibly. They gambled on new taxes and we all lost.
Where some of us in this Chamber disagree--is whether property tax increases are inevitable. I know property tax increases can be avoided. For example, if every city and town employee throughout our state--including all school department personnel--were to agree to a salary reduction plan this year and next, just as state workers have done, tens of millions of dollars could be saved.
This legislature has the ability to prevent property tax increases by enacting sweeping authorizations that will allow our local leaders to reduce spending. For example, it is long past time to allow the city and town councils of every municipality to have control over their school budgets.
Therefore, if you pass a bill in this recession that raises taxes on the hardworking families of Virginia--I WILL VETO IT. And if you pass a budget embedded with those same tax increases--I WILL NOT APPROVE IT.
So we must raise some additional revenue. The longer we put this off, the less effective it will be in stabilizing our financial position. Over the long run I support a responsible pro-growth tax reform package that includes tax cuts.
However--we must ensure a revenue base that supports vital functions through this downturn. And we can no longer consider debt as a source of state revenue.
Government must live within its means. I did not create this situation--but I intend to resolve it--and continue telling the people the truth about it.
Here is my plan to come up with the $400 million--we need to raise two taxes. We must take the cigarette and tobacco tax from 79 cents a pack and raise it to the national average of $1.34. Not only will this allow us to raise revenue, it has the added benefit of reducing teen smoking. We must also raise our sales tax by one cent for a temporary period of 36 months. A temporary increase of just one cent allows us to fund our programs at the minimum acceptable levels while we work our way out of this recession. I am then proposing that after the third year the tax retreat, leaving just two tenths of a cent in place that would be available to craft a moderate but necessary highway program.
Our economy is diverse, whereas our tax system is not; 144,000 taxpayers pay almost 50% of all personal income taxes. Now, think about that--38 million Californians have to rely on 144,000 people for their schools, their public safety and so many other services. That makes absolutely no sense.
Now, here is what we need to accept. Our economy is 21st century and our tax system is 20th century. It is stuck in the wrong century.
The Tax Reform Commission proposed major, radical reforms. Now, some people right away said they are too bold and thu they would be too hard to enact. Now, what do they mean too bold? Bold is what we do in California. And what do they mean too hard? If I had hesitated in my career every time I made a move because it was too hard, I would still be yodeling in Austria.
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| Candidates and political leaders on Tax Reform: | |||
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Retired Senate as of Jan. 2015: GA:Chambliss(R) IA:Harkin(D) MI:Levin(D) MT:Baucus(D) NE:Johanns(R) OK:Coburn(R) SD:Johnson(D) WV:Rockefeller(D) Resigned from 113th House: AL-1:Jo Bonner(R) FL-19:Trey Radel(R) LA-5:Rod Alexander(R) MA-5:Ed Markey(D) MO-9:Jo Ann Emerson(R) NC-12:Melvin Watt(D) SC-1:Tim Scott(R) |
Retired House to run for Senate or Governor:
AR-4:Tom Cotton(R) GA-1:Jack Kingston(R) GA-10:Paul Broun(R) GA-11:Phil Gingrey(R) HI-1:Colleen Hanabusa(D) IA-1:Bruce Braley(D) LA-6:Bill Cassidy(R) ME-2:Mike Michaud(D) MI-14:Gary Peters(D) MT-0:Steve Daines(R) OK-5:James Lankford(R) PA-13:Allyson Schwartz(D) TX-36:Steve Stockman(R) WV-2:Shelley Capito(R) |
Retired House as of Jan. 2015:
AL-6:Spencer Bachus(R) AR-2:Tim Griffin(R) CA-11:George Miller(D) CA-25:Howard McKeon(R) CA-33:Henry Waxman(D) CA-45:John Campbell(R) IA-3:Tom Latham(R) MN-6:Michele Bachmann(R) NC-6:Howard Coble(R) NC-7:Mike McIntyre(D) NJ-3:Jon Runyan(R) NY-4:Carolyn McCarthy(D) NY-21:Bill Owens(D) PA-6:Jim Gerlach(R) UT-4:Jim Matheson(D) VA-8:Jim Moran(D) VA-10:Frank Wolf(R) | |
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