Taxpayer Protection Act Shields Working Families

Sep 16, 2014 News Release

For Immediate Release
Commonwealth Foundation
Contact: 717-671-1901

Taxpayer Protection Act Shields Working Families

Stimulates Job Growth and Provides Rebates for Working Families

September 16, 2014, HARRISBURG, Pa.—Today, the Senate Finance Committee passed Senate Bill 7, commonly known as the Taxpayer Protection Act (TPA), out of committee, signaling that protecting taxpayers’ pocketbooks is high on lawmakers’ priority lists in the Fall session.

“The Taxpayer Protection Act promises Pennsylvanians a simple yet effective shield against unsustainable increases in state spending—and the tax increases that inevitably follow,” commented Nathan Benefield, vice president of policy analysis for the Commonwealth Foundation. “Guardrails on spending growth are widely supported in polling and, as we’ve seen when such measures have been enacted in other states, promise to boost job growth and ease the tax burden on middle class families.”

The TPA limits spending increases to the rate of inflation plus the state’s population growth and establishes a “Rainy Day Fund” that can be tapped to balance the budget during a recession. TPA limits could be exceeded with a two-thirds majority vote of both House and Senate.

“Despite what special interest groups may say, the Taxpayer Protection Act does not mandate any spending cuts,” Benefield continued. “It simply limits the rate of future spending growth to a responsible level.”

Consistent popularity with voters

A 2012 poll of likely voters showed bipartisan support for limiting the growth of state government:

65% support overall
55% support among Democrats
70% support among Republicans and Independents

These results mirror those found in polls from 2005, 2008, and 2010.

Tested in other states

Colorado passed a similar measure called the Taxpayer Bill of Rights (TABOR) in 1992 and the results have been a boon to state residents.

Workers made more money, jobs were created, and the state economy grew significantly.

From eight years prior to TABOR to eight years after, Colorado rose from:

43rd to 7th in median family income growth
33rd to 6th in job growth
43rd to 7th in per capita economic growth

From 1997 to 2001, $3.2 billion in tax rebates were returned to taxpayers, equaling nearly $3,200 per family of four.

Benefield continued:

“The Taxpayer Protection Act would boost investment and job growth by creating a predictable business environment, require state government to prioritize spending in areas that need it most, and return surplus funds where they’re needed most and can be best used—to the taxpayers themselves.”

Nathan Benefield is available for comment on Senate Bill 7 and the Taxpayer Protection Act. Please contact us at 717-671-1901 to schedule an interview.

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For more information, please contact our director of media relations for the Commonwealth Foundation at 171-671-1901 or media@commonwealthfoundation.org.

The Commonwealth Foundation, founded in 1988, crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.