Tax Cuts

TRENTON - Demanding that Democrats deliver his version of a tax cut, Gov. Christie invoked his constitutional powers Saturday to call lawmakers back from vacation into a special legislative session. The Republican governor notified Democratic legislative leaders with just 48 hours' notice, as legally mandated, and not a minute more. He will address a combined Assembly and Senate at 11 a.m. Monday and then leave the Statehouse chambers with the hope the bodies will debate his tax-cut recommendations.

Have you ever wondered why, in the midst of a long period of a relatively healthy state economy, Pennsylvania's state budget can be balanced only through cuts or freezes in services? Gov. Ridge has proposed a state budget for fiscal year 1996-97 that calls for major reductions or freezes in health care, mortgage assistance, welfare, mass transit and education. He also has proposed new corporate tax cuts and increased spending for prisons. State programs that have been in effect for years are being dismantled to pay for tax cuts - primarily for corporations - enacted in 1994 and 1995: Act 48, passed in 1994, reduced Pennsylvania's corporate income tax rate, phasing in the reduction by decreasing the rate, from 12.25 to 9.99 percent, over several years.

RE: COKER Roberts Jr.'s Sept. 20 letter: It wasn't only the wealthy who received tax cuts. Everyone, without regard to class, got them. As a matter of fact, did Mr. Roberts know that the top 80 percent of all federal income tax is paid by the top 20 percent of wage earners? And creating good, well-paying jobs for the poor only works if these people are willing to work, which many are not. Hopefully, there will be plenty of work to go around for the displaced residents of New Orleans, but keep in mind that the areas most affected by Katrina were home to some of the least-educated and skilled people in the country, precluding them from many of the jobs available in the rebuilding process.

The Republican-controlled Senate yesterday disregarded Democratic opposition and warnings of a veto by Gov. Casey to approve $98 million in business and utility tax cuts. The Senate voted largely along party lines to reduce the business-targeted capital stock and franchise tax from 0.95 percent to 0.85 percent and the utilities gross-receipts tax, a levy that consumers pay through utilities, from 4.4 to 4.1 percent. Now both measures will go to the House, where Democrats hold a majority and the bills are likely to get a hostile reception.

THIS PAST week in City Council, a majority of Council members voted in favor of cuts to the wage tax and business privilege tax that will cost city government $3 billion in revenue over the next 12 years. The proponents of these tax cuts like to say that they will cost "only" $160 million over the next five years. But what this characterization leaves out is that the cost of these cuts deepens dramatically once we get through those five years - and hits $3 billion by 2017. These tax cuts were approved in addition to a $375 million tax reduction program already included in the City's Five-Year Financial Plan submitted to City Council by the Street administration.

Congress has proven yet again, with its latest round of tax cuts, that neither party's lawmakers take the deficit seriously. This time, Congress voted to increase the deficit by $146 billion over the next 10 years. It will be the fourth tax cut enacted by President Bush in the last four years, totaling $1.9 trillion over a decade. We're not disputing that this new tax relief helps those who need it. Several features are aimed at the middle class. But lawmakers' willful ignorance of the deficit side of the equation is plain recklessness.

Like most people, including editorial writers, I enjoy those occasions when I can say "I told you so. " Unfortunately, this is one time when I wish that I had been wrong. For the last several months, I have been arguing that City Council's current romance with tax cuts was going to result in a reduction in the services provided by the city and eventually layoffs of city workers. I repeated these warnings so often that your editorials have described them as Tom Cronin's "familiar rants.

As the debate over the tax cuts proposed by the Tax Reform Commission unfolds in City Council, in newspaper editorials, and with the public, charges and countercharges are flying back and forth. This is the right moment to set the record straight on where the Street Administration stands on tax reform. We stand for responsible tax reform. In fact, we're doing it, and have been throughout this Administration. No one has done more to provide tax relief in Philadelphia over the past nine years than John F. Street.

LAST WEEK, the mayor's consumer affairs director, Lance Haver, presented an entertaining but factually inaccurate argument against reducing business taxes in Philadelphia. It's puzzling why someone like Mr. Haver - who has built his reputation on being a passionate voice for working people - would oppose action that would go a long way toward providing jobs for Philadelphia citizens and economic opportunity in their neighborhoods. The majority of neighborhood business owners will readily attest that the business privilege tax severely hurts their operation and all businesses, not just big companies.

Ernie Preate Jr. has joined the other three Republican candidates for governor in calling for tax cuts and less government. But the state attorney general and leading contender in the May 10 GOP primary yesterday offered more details and deeper cuts than his opponents. The conservative Republican wants to slice corporate taxes one-third, freeze state hiring and spending, lop 3,600 state workers off the payroll and, maybe, fingerprint welfare clients in an effort to catch more fraud.