House Republican Budget Relies on Unrealistic, Ill-Considered 'Tax Amnesty' for Those...

House Republican Budget Relies on Unrealistic, Ill-Considered 'Tax Amnesty'
for Those Who Break the Law, Revenue Secretary Says

HARRISBURG, Pa., July 10 /PRNewswire-USNewswire/ -- Revenue Secretary Stephen
H. Stetler today issued the following statement in response to the House
Republican budget proposal:

"The House Republicans today unveiled a fiscally irresponsible budget
blueprint: a plan that fails to take the difficult but necessary steps that
Governor Rendell has proposed to bring our budget into balance for the
long-term, and that instead relies on a 'tax amnesty' gimmick that is unlikely
to work and that sends the wrong message to hard-working taxpayers.

"Under former Governor Ridge, the Department of Revenue concluded in a report
following a tax amnesty conducted in 1995-96 that 'additional Tax Amnesty
programs in the future would be harmful to the progress being made by the
Department' in getting taxpayers to comply with paying their taxes.

"I hope that Pennsylvanians are not misled by the House Republican math. Their
news conference said that Pennsylvania has $3 billion in outstanding
delinquent taxes. In fact, of the actual amount of $3.2 billion, half - or
$1.6 billion - has been deemed uncollectible, meaning that it is tied up in
bankruptcy and other court proceedings. Of the remaining $1.6 billion that is
technically 'collectible,' $600 million was due from the 1920's through 2003 -
which makes the debts so old that they are unlikely to be turned in during any
'amnesty.'

"When Pennsylvania offered tax amnesty for 90 days during Governor Ridge's
administration, it generated $93 million. But it cost the department $10
million to successfully administer this program. In addition, in the two years
after the tax amnesty, delinquent tax collections dropped - by $42 million in
the first year and $20 million in the second year. Finally, the amnesty
resulted in waived penalties of $10 million. That means the total real benefit
to the state was just $11 million, or about four one-hundredths of one percent
of our total General Fund budget.

"Another reason that 'tax amnesty' is unlikely to generate significant new
revenue for the state is that the Rendell administration has dramatically
improved delinquent tax collections over the last six years. In 2007-08, we
collected a record $900 million in delinquent taxes - which is 60 percent more
than the year before Governor Rendell took office.

"Ninety-seven percent of taxes in Pennsylvania are paid voluntarily.
Hard-working families live up to their responsibility to contribute to roads,
schools, economic growth and vital services. Allowing those few who break the
law to avoid penalties is an insult to all of us who pay our taxes in full and
on time."
CONTACT: Stephanie Weyant
(717) 787-6960

SOURCE Pennsylvania Department of Revenue

Stephanie Weyant of the Pennsylvania Department of Revenue, +1-717-787-6960