Raise in Taxes, Unannounced?

“It’s not a tax increase,” says the spokesman of Pennsylvania’s Republican governor whose plans involves wholesale tax increase on gasoline. This project shall raise funds amounting to $1.8 billion, which will be used for transportation improvements.

Meanwhile, things aren’t necessarily better in New York, with Governor Cuomo bragging they are able to have good budgets without laying the burden on the taxpayers. Nevertheless, it must be noted that a key element of this budget balancing act entails raised taxes on people earning high incomes, a move that didn’t receive wide acceptance in 2010.

Increase on taxes has become a necessity during the post-recession, when tax collections were inadequate to suffice government services and projects. However, as the public would quickly frown on overt tax increases, such policies would have to be labeled cunningly. State governors and lawmakers have to come up with clever names and explanations for extensions on taxes.

The exercise in terminology begins with any phrase that doesn’t have the word “tax” in it. You might have heard of impact fees or revenue enhancements, all of which only mean one thing—more money from taxpayers.

Politicians usually have to think this decision through, because it could have bad repercussions on their 2014 campaigns. Any candidate vying for reelection has to be careful in coming up with bills that demand citizens higher taxes. So, there’s this conflict between the need for bigger revenues through bloated taxes and the need to gain public approval.

Gov. Tom Corbett of Pennsylvania had to wait for his third term to support a tax increase plan to fund infrastructure projects. Talks were done in private before the legislators’ summer break. Such plan would affect fuel distributors. Corbett proposes a five-year increase on wholesale gas taxes. What is unclear is whether the increase on taxes shall be shouldered by consumers.