ITEP Report: Tax Fairness in Pennsylvania

Every few years, the Institute on Taxation and Economic Policy releases its survey of taxes in the states, “Who Pays?” Click here to read the seventh edition, released on January 9, 2024.Ā  A summary of the data for Pennsylvania is found below. This year’s report continues to tell the same story that we have seen for decades. Taxes in Pennsylvania are among the most upside-down in the entire country. The report shows that The lowest-income 20 percent of taxpayers face a state and local tax rate that is 152 percent higher than the top 1 percent of households. The average effective state and local tax rate is 15.1 percent for the lowest-income 20 percent of individuals and families, 11.4 percent for the middle 20 percent, and 6 percent for the top 1 percent. Pennsylvania has the highest tax rate on low-income families in the entire country at 15.1%. Pennsylvania hasā€¦ Continue reading

Press Release: Taxes in Pennsylvania Are Upside-Down

FOR IMMEDIATE RELEASE: January 10, 2024 Ā Contact: Kirstin Snow at Penn Policy Center snow@pennpolicy.org or Jon Whiten at ITEP jon@itep.org. RELEASE: Pennsylvaniaā€™s Tax System Exacerbates Inequality, In-Depth National Study Finds State Has the 4th-most Regressive Tax Code in the Nation Harrisburg, PA ā€” Pennsylvaniaā€™s tax system is upside-down, with the wealthy paying a far lower share of their income to taxes than low- and middle-income families. Thatā€™s according to the latest edition of the Institute on Taxation and Economic Policyā€™s Who Pays?, the only distributional analysis of tax systems in all 50 states and the District of Columbia. In sharing the data, Marc Stier said, ā€œThe new report from our national partner, the Institute on Taxation and Economic Policy, shows that Pennsylvania has one of the most upside-down state and local tax systems in the country. We should be ashamed to live in a state with the highest rate ofā€¦ Continue reading

Survey Results: Levels of Support for Higher Taxes on Profitable Corporations and Wealthy Individuals by PA House District

In November and December of 2022, Data for Progress conducted a national survey of registered voters to gauge voter support towards state action to hold profitable corporations and the wealthy accountable to pay their fair share of taxes. The national survey was then used to estimate opinion at the state level for Pennsylvania using a machine learning model trained on nationally representative survey responses linked to a commercial voter file. In addition, estimates were made of public support in each state House and Senate district. Click here for state-wide results. Perhaps surprisingly, the differences between PA House districts held by Democratic and Republican legislators are not all that great. Registered voters in both Democratic and Republican districts overwhelmingly support tax increases on profitable corporations and wealthy individuals. The highest support percentage in Democratic districts was 92%, the lowest was 81%. The average support percentage in Democratic districts was 86%. Theā€¦ Continue reading

Is Harrisburg Ready for Change?

Is new leadership showing a new approach to legislating? Marc Stier, Executive Director Since Democrats finally took control in March, we have seen the House of Representatives pass a raft of legislation and budget proposals that not only reflect the priorities of Democrats and progressives but also has broad support in the state. Little of this legislation has be taken up, however, let alone passed, by the Senate. Three months after the start of the fiscal year, the code bills necessary to complete the budget have not been enacted. Last week, Democrats took a new approach, one that not only has the potential to finish the budget but could radically change the legislative process in Harrisburg for the better. In three key areas, House Democrats, led by Speaker Joanna McClinton and Majority Leader Matt Bradford, put forward code bills and legislation that are bipartisan in spirit and detail. They advanceā€¦ Continue reading

PA House Passes Proposals to Reduce Taxes for Working People

Four Major Proposals Will Make Pennsylvania Taxes Fairer The Pennsylvania House today passed the second and third of four major tax proposals: an expansion of the Child and Dependent Care Enhancement Tax Credit (HB 1259) and the creation of a state Earned Income Tax (HB 1272). These actions follow on House passage of an expansion of the Property Tax / Rent Rebate Program (HB 1110) on January 6. The House is expected to act soon to pass the repeal of the gross receipts tax and sales and use tax on wireless cell phone services (HB 1138). Taken together, the four bills that have been, or will soon be, passed by the House of Representatives will reduce taxes for working people in Pennsylvania and make our stateā€™s tax system fairer. While there is more to be done to fix our upside-down tax system in which the wealthiest Pennsylvania families pay taxesā€¦ Continue reading

Why We Need a Property Tax Circuit Breaker

Statement of Marc Stier at Senator Jimmy Dillon / Representative Robert Freeman press conference on establishing a property tax circuit breaker in Pennsylvania on April 25, 2023 Iā€™m very pleased to stand with Senator Jimmy Dillon and Representative Robert Freeman in support of establishing a property tax circuit breaker in Pennsylvania. The Pennsylvania Budget and Policy Center first proposed such a plan in 2015 and our new organization, the Pennsylvania Policy Center, continues to support it. Representative Freeman has long championed it, and we are glad to see Senator Dillion become a champion of it as well. Pennsylvania has long had a serious problem: our tax system is unfair. State and local taxes in our commonwealth place a much greater burden on families with low incomes and moderate incomes than those with high incomes. Just to give you an idea of how unfair our tax system is, consider this: Theā€¦ Continue reading

Why We Need a Property Tax Circuit Breaker in Pennsylvania

tatement of Marc Stier at Senator Jimmy Dillon / Representative Robert Freeman press conference on establishing a property tax circuit breaker in Pennsylvania on April 25, 2023 Iā€™m very pleased to stand with Senator Jimmy Dillon and Representative Robert Freeman in support of establishing a property tax circuit breaker in Pennsylvania. The Pennsylvania Budget and Policy Center first proposed such a plan in 2015 and our new organization, the Pennsylvania Policy Center, continues to support it. Representative Freeman has long championed it, and we are glad to see Senator Dillion become a champion of it as well. Pennsylvania has long had a serious problem: our tax system is unfair. State and local taxes in our commonwealth place a much greater burden on families with low incomes and moderate incomes than those with high incomes. Just to give you an idea of how unfair our tax system is, consider this: Theā€¦ Continue reading

A Fair Share Tax for Pennsylvaniaā€“Updated for 2023

By Mafc Stier and Diana Polson Pennsylvania has long suffered from a tax system that is both highly regressive, taking a larger share of income from low-income and moderate-income families than high-income families, and that does not raise sufficient revenue to meet the needs of Pennsylvanians. In the recent past, inadequate revenues have led to a structural budget deficit and will continue to do so in the near future. In turn, this has led to what we call a public investment deficit: a lack of funding for critical needs that undermines both opportunity and economic growth. Just one example of the public investment deficit in Pennsylvania is the recent decision by Commonwealth Court President Judge Jubelirer saying the state fails to meet its constitutional obligation to provide a ā€œthorough and efficientā€ education to all K-12 school children. This paper puts forward the Fair Share Tax proposal, a major step towardā€¦ Continue reading