Category: Pennsylvania State Taxes

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The Revenue Shortfall and the Budget

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget, Pennsylvania State Taxes

Marc Stier | 10/07/2016 Blog Almost as soon as the Pennsylvania budget was passed in July, rumors swirled about the legislature coming back—either in a lame duck session in December or next year—to fix it because it was not truly balanced. The Department of Revenue’s announcement yesterday that revenues for the year to date are running $218 million below estimates, makes revisting the budget even more likely. In July, we at PBPC pointed out that estimates of some of the one-time revenuesincluded in the budget—especially those from selling licenses for internet gaming, for a second Philadelphia casino, and for the expansion of alcohol sales—were possibly over-stated. We also said that we were not confident that enough money was appropriated to meet the likely caseload for medical assistance (The Commonwealth must appropriate its share of funding for these programs to continue to draw down the federal funding for them.) Those problems… Continue reading

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How Pennsylvania Should Raise Revenues This Year

  By Pennsylvania Budget, Pennsylvania State Taxes

Now that a general appropriation bill has been passed by the House and Senate, the General Assembly and the Governor are turning their attention to finding the revenue to pay for it. And they are running into difficulties both reaching agreement on tax revenues that are real, recurring, and fair. But the PBPC-Senator Haywood proposal to slightly raise taxes on income from wealth meets all three criteria. Continue reading

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Some Things are Worse Than a Late Budget

  By Pennsylvania, Pennsylvania Budget, Pennsylvania State Taxes

From the Third and State blog. As the June 30th deadline looms, we have little more than rumors about what kind of Pennsylvania budget might be enacted by the General Assembly for 2016-17. But while some may find optimism in talk of getting the budget done, the rumors we are hearing about the details of the budget in the works are extremely worrisome. We know that everyone on both sides of the aisle wants a budget done more or less on time. All members of the House and half the members of the Senate face re-election in November, and none of them want a long, drawn-out budget and delays in funding schools and human services. Yet to reach agreement on a budget legislators have to find their way between their determination to get one done and the structural deficit that requires either some new revenues or difficult budget cuts. More… Continue reading

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How to Create a Progressive Income Tax in Pennsylvania

  By Pennsylvania, Pennsylvania State Taxes, Published op-eds

Originally appeared as How to create a progressive income tax in Pennsylvania, in Newsworks, May 24. So, it turns out that you can actually create a fair income tax in Pennsylvania. One of the unfortunate conditions of Pennsylvania politics has been our “uniformity clause,” which prohibits taxing any one class of income at different rates. It has stood in the way of creating what most states with an income tax have, a graduated system in which those with higher incomes pay at a higher rate. A consequence of our uniformity clause is that our state and local taxes, taken together, are among the most regressive in the entire country. The Institute on Tax and Economic Policy lists Pennsylvania as one of the “Terrible Ten” states with the most unjust tax system. It’s not hard to understand why. State and local taxes take a little over 12 percent of the income of the… Continue reading

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PBPC Research Prompts Senators to Introduce Tax Fairness Legislation

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget, Pennsylvania State Taxes

Originally appeared on the Third and State blog, on May 11, 2016. Something new and unusual happened in Harrisburg today. Senators Art Haywood, Vincent Hughes and Jay Costa put forward an idea that actually could help resolve the pressing fiscal cliff we face this year, and at the same time could make our tax system more progressive. Despite partisan differences, three goals are more or less shared by everyone in Harrisburg. While their top priority may differ, for the most part, legislators all say they want: 1. to close the $1.8 billion structural deficit; 2. to spend more on education; 3. and to put no additional tax burden on low- and middle-income taxpayers. Yet no one has presented a plan to accomplish this feat. In an election year, legislators will say that they are not willing to raise the income tax or sales tax – which could generate the necessary… Continue reading

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No One Wants Leviathan

  By PA Budget and Policy Center, PBPC Blog posts, Pennsylvania Budget, Pennsylvania State Taxes

Republicans claims that government has been getting larger and larger in Pennsylvania and that Democrats want it to grow bigger still. They are wrong on both counts. Government in Pennsylvania is smaller than it has been in decades. And Democrats only seek to restore it to the size it averaged over the last 20 years. Continue reading

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Which Door Will the Taxman Knock On?

  By Pennsylvania State Taxes, Published op-eds

Originally published in the Allentown Morning Call, February 6, 2016 If we in Pennsylvania are to avoid another billion-dollar cut in education spending plus a billion-dollar cut in spending on health care and human services, the taxman is going to have to knock on someone’s door. It’s time the knock comes on the doors of corporations and the wealthy, not those of the middle class and working people. The state’s Independent Fiscal Office recently projected that if no changes were made to current policy and taxes, the state of Pennsylvania would run a deficit of $318 million during the current year. That deficit would rise to $1.8 billion or more in the fiscal year beginning July 1. And that is the deficit before any new spending. If Gov. Wolf and the General Assembly reach an agreement on education spending, but not on how to raise the revenue to pay for… Continue reading

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Why Conservatives Can Like Pennsylvania’s Personal Income Tax

  By Pennsylvania, Pennsylvania Budget, Pennsylvania State Taxes

Originally published at Third and State, December 14, 2015 Rumors of a sudden interest on the part of Republicans in raising the personal Income tax (PIT) instead of the sales tax to meet the revenue requirements of the budget framework have floated across 3rd Street to our offices at the Pennsylvania Budget and Policy Center. So I’m going to do something unusual for us—and frankly a bit uncomfortable—and give some conservative arguments for preferring the PIT over the sales tax. First, a PIT increase is for three reasons likely to place a smaller burden on businesses than a sale tax increase. For those goods and services on which the sales tax is imposed, the tax is paid on every purchase. It thus dissuades some people from making purchases. It especially dissuades those who live near a border with a state that has a lower sales tax from buying goods in… Continue reading

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PA Sales Tax can be Expanded in an Equitable Way

  By Budget, Pennsylvania, Pennsylvania Budget, Pennsylvania State Taxes, Public Policy, Taxation

Originally published in NewsWorks, December 7, 2015 Legislators have been considering raising new — and necessary — revenue by expanding the sales tax base to include more goods and services instead of increasing the sales tax rate. This would be a good way to raise revenue if it is done in ways that make the tax more equitable. Still a broader sales tax would fall more heavily on low-income families. Legislators could limit the burden on those least able to bear it by coupling the sales tax expansion with a new, refundable sales tax credit. The inequity of the sales tax The original budget framework increased the state’s sales tax rate from 7 percent to 8.25 percent (and from 8 percent to 9.25 percent in Philadelphia). This proposal was opposed by many legislators. Some opposed any tax increase. Others worried that businesses near our borders with other states would lose… Continue reading