FOR IMMEDIATE RELEASE: November 11, 2026
MEDIA CONTACT:
Kirstin Snow, Communications Director
snow@pennpolicy.org
RELEASE: PPC Calls on Pennsylvania’s New Governing Majority to Deliver on Affordability with Fair Share Tax
Updated policy paper builds on PPC’s previous research with new modeling showing how Pennsylvania could lower taxes on income from work, raise taxes on income from wealth, and generate an estimated $4.4 billion annually for essential public services
Harrisburg, PA — With Pennsylvania’s newly elected governing majority preparing to take office, Pennsylvania Policy Center today released an updated and expanded Fair Share Tax policy paper, building on its previous research with new data and modeling that offer state leaders a concrete solution to two of the Commonwealth’s most pressing challenges: making Pennsylvania more affordable and generating the sustainable revenue needed to invest in its people and communities.
The proposal would lower Pennsylvania’s personal income tax rate on specified sources of income from work, like wages and salaries, to 2.8 percent, while increasing the rate on specified sources of income from wealth, like dividends, capital gains, to 7.5 percent. New modeling by the Institute on Taxation and Economic Policy (ITEP) estimates the proposal could generate approximately $4.364 billion in additional annual revenue, providing a significant opportunity to address Pennsylvania’s structural budget deficit and strengthen essential services, including public education, health care, child care, transportation, and food access.
Following the November 3 election, which gave Democrats control of both chambers of the General Assembly alongside Governor Josh Shapiro, PPC is urging the Governor’s administration and incoming House and Senate leadership to seriously consider the Fair Share Tax as part of a coordinated legislative and revenue agenda focused on delivering meaningful affordability results for Pennsylvania families.
“The election created a new opportunity to govern, but political majorities alone don’t make life more affordable for Pennsylvania families. Policy choices do,” said Felicity A. Williams, Esq., Executive Director of the Pennsylvania Policy Center. “Pennsylvanians need to see results in their paychecks, their household budgets, and the public services they depend on. Our Fair Share Tax proposal offers state leaders a concrete path forward: lower taxes on income from work, ask more of income derived from wealth, and generate billions in recurring revenue to invest in the things that make everyday life more affordable. The opportunity is here. Now it’s time to deliver.”
Read the full Fair Share Tax policy paper: https://pennpolicy.org/research_publication/fair-share-tax-proposal-brief-2026/
A Fairer Tax System for Pennsylvania
Pennsylvania currently has the fourth-most regressive state and local tax system in the nation, according to ITEP. The lowest-income 20 percent of Pennsylvania households pay an average of 15.1 percent of their income in state and local taxes, compared with just 6 percent for the wealthiest 1 percent.
This upside-down tax system places a disproportionate burden on working families while asking significantly less, as a share of income, from those at the top.
At the same time, Pennsylvania generally taxes income from work and income from wealth at the same flat personal income tax rate of 3.07 percent, despite meaningful differences in how those types of income are earned, received, and distributed across households.
Building on PPC’s previous Fair Share Tax research and advocacy, the updated policy paper outlines how Pennsylvania could modernize its personal income tax by distinguishing between different sources of income rather than continuing to tax them at the same rate.
Pennsylvania’s Constitution includes a Uniformity Clause that has historically limited the Commonwealth’s ability to adopt a graduated income tax, which applies higher rates as a taxpayer’s income increases. Rather than establishing different rates based on how much someone earns, PPC’s Fair Share Tax proposal distinguishes between legally defined sources of income, applying the same rate to everyone within each proposed category. The updated policy paper examines how this approach could advance tax fairness within Pennsylvania’s existing constitutional framework.
Turning Political Opportunity into Affordability Results
The updated research builds on PPC’s November 4 post-election call for state leaders to translate political change into meaningful improvements in Pennsylvanians’ lives.
Through For Our Common Wealth, a statewide coalition of organizations and advocates, PPC is advancing a comprehensive affordability agenda centered on increasing household incomes, reducing essential costs, and strengthening the public services and supports families rely on.
The Fair Share Tax is a central component of that agenda and one part of a broader revenue strategy that includes closing corporate tax loopholes through worldwide combined reporting, establishing a natural-gas severance tax, and repealing costly tax exemptions for data centers.
Together, these reforms would help Pennsylvania confront its persistent structural budget deficit while creating the fiscal capacity to invest in higher wages, targeted tax relief for working families, stronger public schools, affordable child care, reliable public transit, health care, and food security.
“Pennsylvania cannot build a lasting affordability agenda on temporary budget fixes or by asking working families to shoulder more of the burden,” Williams said. “We do not have to choose between lowering taxes on income from work and investing in the schools, health care, child care, and transportation our communities need. We can do both, but it requires a fairer tax system and the political will to act. We encourage Governor Shapiro and leaders in both chambers of the General Assembly to make the Fair Share Tax a serious part of the conversation as they develop the Commonwealth’s next budget and legislative agenda.”
About the Estimates
The policy paper includes updated August 2026 modeling by ITEP, an examination of Pennsylvania’s existing tax structure, and alternative Fair Share Tax scenarios illustrating different approaches to balancing household tax relief and revenue generation.
The estimated $4.4 billion represents additional annual revenue modeled at 2026 income levels, not guaranteed collections or revenue necessarily available in the first year of implementation.
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Pennsylvania Policy Center (PPC) is a statewide, nonpartisan 501(c)(3) research, policy, and public education organization working to build a Pennsylvania where everyone has the opportunity not just to get by, but to get ahead. PPC combines rigorous policy analysis with public education, coalition building, and advocacy rooted in research and lived experience to advance economic, racial, and gender justice and strengthen democracy. Working with communities and partners across the Commonwealth, PPC advances policies that strengthen economic security, promote tax fairness, and expand access to health care, nutritious food, quality education, and other essential public services. Learn more at www.pennpolicy.org.