Unlike Doyle, Rendell Recognizes Oil Tax Realities

By June 27, 2007Energy

As noted earlier, Wisconsin Governor Hugo Doyle and his legislative allies are intent on raising taxes on the oil companies while pretending they can make it illegal for those businesses to pass on the increased costs to the customer. Preposterous, unconstitutional and invidiously populist. Not such good economics, either. And politically?

Pennsylvania Governor Ed Rendell, in contrast, is an adept politician skilled at reading the electorate’s mood. So ….

HARRISBURG — Gov. Ed Rendell made three major concessions to legislative critics yesterday, dropping his controversial plans to lease the Pennsylvania Turnpike, tax oil company profits and raise the state sales tax by one full percentage point.

Like Doyle in Wisconsin, Rendell originally wanted to make it illegal to pass on the tax, that is, to make the standard kind of operating and accounting decisions that any business must make in a market economy. And populist claims aside, the tax would have affected hundreds of businesses in the state.

The Pennsylvania Chamber of Business and Industry welcomed Rendell’s decision.

HARRISBURG, PA – The Pennsylvania Chamber of Business and Industry welcomed Gov. Ed Rendell’s announcement to drop his bid for a harmful oil industry gross profits tax, and is urging state lawmakers to reject other new and/or expanded taxes as part of the 2007-08 budget.

Wrongly couched by the administration as a tax on “big oil,” the oil gross profits tax would have negatively impacted any producer or distributor of fuel, including many small to mid-size independent companies – more than 270 businesses in total.

“This tax would have sent a terrible message to any company thinking about locating and/or expanding in the Commonwealth,” said Gene Barr, PA Chamber vice president of government and public affairs. “On behalf of our more than 24,000 statewide members and customers, the Pennsylvania Chamber is pleased that the governor is abandoning this detrimental proposal.”

Back to you, Governor Doyle.

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