Category: Taxation

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STATEMENT: It’s Not the Time or Way to Cut Corporate Taxes

  By Corporate Taxes, PA Budget and Policy Center, Pennsylvania State Taxes, Statements

Originally published by the Pennsylvania Budget and Policy Center, April 26, 2022.  Statement on HB 1960, which passed the PA House of Representatives today When the American Rescue Plan (ARP) was enacted, we warned that Republicans in Pennsylvania would use these funds—and the state surplus generated by the faster economic recovery the ARP created—to cut corporate taxes instead of helping Pennsylvanians deal with the effects of the pandemic. Sadly, today that is exactly what happened. The PA General Assembly has repeatedly failed to help Pennsylvanians who are still hurting from both the loss of income caused by business decline and the current inflation created by a rapid recovery and Russia’s war against Ukraine. The General Assembly has doggedly rejected Governor Wolf’s proposals to provide assistance to Pennsylvanians with low incomes or those who are having trouble affording child care or housing or who are struggling to pay back student loans.… Continue reading

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Guest Commentary: Is This Really Taxadelphia?

  By PA Budget and Policy Center, Philadelphia, Philadelphia Taxes, Published op-eds, Taxation

The director of a state budget and policy organization has an answer that may surprise you BY MARC STIER Originally published in The Philadelphia Citizen, April  21, 2022 “Philadelphia is one of the highest-taxed cities in the United States.” But you knew that, right? It’s common knowledge. Everyone knows it. Everyone also knows that Philadelphia has been growing slowly because of its high taxes.Beware of what “everyone knows.” Sometimes ideas get repeated so often, they become common knowledge that turns out to be wrong.The truth is that of the 30 largest cities in the United States, Philadelphia ranks 13th in tax revenue per person per year. The falsehood that Philadelphia has one of the highest tax rates in the country is not a neutral fact. It has political implications. It reinforces the narrative that blames Philadelphia’s high taxes for its anemic job growth. At $4,302, Philadelphia’s per person revenue is… Continue reading

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It’s Time to Reinstate the Philadelphia Wealth Tax

  By PA Budget and Policy Center, Philadelphia, Philadelphia Budget, Philadelphia Taxes, Policy reports, Wealth Tax

Wealth inequality in America, in Pennsylvania, and in our region has been growing strikingly since the late 1970s. And wealth inequality continues to increase during the pandemic. The dramatic rise in wealth inequality threatens economic growth, reduces the tax revenues needed to fund vital public institutions, and undermines our democracy. To counter wealth inequality and to raise the revenue needed to fund programs that support the well-being of working people in our city, we call for the reinstitution of a wealth tax of 4 mill or .4% of the value of intangible wealth in Philadelphia. We estimate that this tax would raise more than $200 million per year in revenues for the city, which would provide the funds necessary to create and / or expand programs that would enable us to break down the barriers of class, race, and gender that stand in the way of opportunity for so many… Continue reading

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The Fair Share Tax Proposal is Uniform Under the PA Constitution

  By Fair Share Tax, PA Budget and Policy Center, Policy reports, Richard Feder, Taxation

By Richard Feder, J.D. For a number of years, the Pennsylvania Budget and Policy Center has been proposing a replacement for Pennsylvania’s Personal Income Tax, which we call the Fair Share Tax. This plan is one of a number of ideas that include corporate tax reform and a natural gas severance tax and are designed to reverse the horrible inequities in our tax system that result in families with low and middle incomes paying taxes to state and local governments at about twice the rate of families in the top 1% of incomes. One of the questions raised about the Fair Share Tax is whether it meets the uniformity clause of the Pennsylvania Constitution. PBPC asked a noted Philadelphia lawyer with expertise in tax matters to do a thorough review of case law and other taxes in the state to answer that question. This is his answer in the form… Continue reading

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Build Back Better Will Cut Taxes For All But the Top 1% of Pennsylvanians

  By Federal Taxes, PA Budget and Policy Center, PBPC Blog posts

Thanks to our friends at the Institute on Tax and Economic Policy, we have new data on the impact of the tax changes in the Build Back Better plan that is under consideration in the House of Representatives as I write. The first table looks at the average change in taxes for families in seven income groups that would occur as a result of all the provisions of the bill as well as due to different parts of the bill—the corporate tax changes, the income tax increase for some individuals, the state and local tax (SALT) cap adjustment, and the Child Tax Credit and Earned Income Tax Credit. As you can see, those in the bottom 20% of families, with an income under $22,400 and an average income of $12,900 will save an average of $1,070 a year. Every group above them receives a smaller average tax cut except the… Continue reading

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The “Billionaire Tax”: What It Is and Why We Need It

  By Billionaire tax, Federal Taxes, PA Budget and Policy Center, PBPC Blog posts, Taxation, Uncategorized, US

UPDATE: Senator Ron Wyden has released his “Billionaires Income Tax” legislation—read the language of the bill here:  https://www.finance.senate.gov/imo/media/doc/Billionaires%20Income%20Tax.pdf. As negotiations between President Biden and House and Senate members over the Build Back Better plan have developed in the last few weeks, a new tax proposal to fund the close to $2 billion investment in health care, child care, paid family leave, climate change, and other programs, has come to the fore: a “billionaire tax.” While Senator Wyden and others have been discussing this proposal for some time, it is a relatively unknown concept and would be a new form of federal taxation. Here we briefly explain what it is and why it is an excellent idea. The new proposal is to tax the increased wealth of the richest Americans each year. The tax would apply immediately to tradeable assets—stocks, bonds, mutual funds, and derivatives—where the value of the asset is… Continue reading

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MEMO: The Corporate Profits Minimum Tax and Why We Need It

  By Corporate Taxes, Federal Taxes, Taxation, US

Democrats are set to introduce a 15% corporate minimum tax as a funding mechanism for the Build Back Better plan. The Corporate Profits Minimum Tax legislation would ensure that roughly 200 corporations that report more than $1 billion in profits to shareholders pay at least a 15% tax rate on those gigantic profits. It would stop giant, profitable corporations, such as Amazon, Bank of America, FedEx, General Motors, Netflix, and Nike, from escaping all federal taxes. These corporations and others like them make huge profits that they report to their stockholders in filings required by the federal government. But they take advantage of multiple tax loopholes to avoid paying federal corporate income taxes. This new tax would raise roughly $200 billion to $300 billion dollars over ten years. These revenues would enable the federal government to make new investments in helping families with children, health care, child care, elder care,… Continue reading

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Build Back Better: A Transformative Plan for 21st-Century America

  By Economic Development, Economic Justice, Education, Energy, Infrastructure, PA Budget and Policy Center, Statements, Taxation, US

President Biden’s Build Back Better framework is an unprecedented and transformative plan to better the lives of all Americans—Black, brown, and white; those with low, moderate, or high incomes; the youngest children and the oldest seniors. It will help families care for children while making quality pre-K available to all 3- and 4-year-olds. It will create hundreds of thousands of good jobs, many in unionized trades and clean manufacturing while drastically cutting greenhouse gases and reducing energy costs for every household. It will reduce the cost of health care and housing for millions. And it will make college education more affordable, boosting the future prospects of our young people and our economy as a whole. It will be paid for by new taxes on the largest, most profitable corporations and the wealthiest Americans while cutting taxes for working people—all while reducing the deficit. The legislative process in America is always… Continue reading

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This Is How (and How Many) Pennsylvanians Are Helped by the Build Back Better Plan

  By Economic Development, Economic Justice, Health Care, PA Budget and Policy Center, PBPC Blog posts, Taxation, US

Updated November 18, 2021. President Biden’s Build Back Better plan is an unprecedented and transformative plan to better the lives of all Americans—Black, brown, and white; those with low, moderate, or high incomes; the youngest children and the oldest seniors. We have given an overview of the whole program—but here we want to focus on the many ways Pennsylvanians will be touched by the Build Back Better plan. These preliminary estimates of the numbers of Pennsylvanians who will benefit from Build Back Better are from official government sources. Soon, we will be updating them with additional and more detailed estimates from policy analysts outside government. How the Build Back Better plan helps Pennsylvania’s children and families Provides access to affordable child care. Child care is a huge burden for families in our state. The annual average cost of sending a young child to a child care center in Pennsylvania is… Continue reading

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Blockbuster Investigation on Tax Avoidance Shows Clear Need for Bold Federal Tax Changes 

  By Billionaire tax, Erica Freeman, Federal Taxes, Other authors, Taxation

By Erica Freeman Last month’s ProPublica revelations identified what many experts, some lawmakers, and a majority of Americans already knew about the U.S. tax code: Policymakers over the past several decades have created a system that allows some of the nation’s wealthiest individuals to pay little or no federal income tax each year.   Ongoing negotiations over the next round of recovery legislation give Congress an opportunity to reverse course by closing loopholes and rolling back tax cuts for those at the top, thereby raising the revenue needed to strengthen the nation’s infrastructure and respond to economic and racial inequalities, according to a new report from the Center on Budget & Policy Priorities.  Improving and expanding the taxation of wealth will bring more balance to the country’s tax code and raise the revenue we need to invest in a recovery that helps Pennsylvania and other states build a better future and an economy that works for everyone, not just the wealthy. Pennsylvania families contribute to… Continue reading