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Press Release – National ITEP Study: Undocumented Immigrants Contribute $523,100,000 in PA Taxes Per Year

By Policy Briefs, Press Release

FOR IMMEDIATE RELEASE

July 29, 2024 

Contact: Kirstin Snow, snow@pennpolicy.org or Jon Whiten at ITEP, jon@itep.org or 917-655-3313 

National Study: Undocumented Immigrants Contribute $523,100,000 in PA Taxes Per Year  

Pennsylvania Policy Center Joins Institute on Taxation and Economic Policy on PA-Specific Release 

Immigration policies have taken center stage in public debates this year, but much of the conversation has been driven by emotion, not data. A new, in-depth national study from the Institute on Taxation and Economic Policy (ITEP) aims to help change that by quantifying how much undocumented immigrants pay in taxes, both nationally and in each state.  

Here in Pennsylvania, undocumented immigrants contributed $523,100,000 in state and local taxes in 2022 — a number that would have risen to $667,000,000 if these taxpayers had been granted work authorization, according to the study.  

Other key findings:  

  • Nationally, undocumented immigrants contributed $96.7 billion in federal, state, and local taxes in 2022. Of this, $37.3 billion went to state and local governments.  
  • For every one million undocumented immigrants who reside in the country, public services receive $8.9 billion in additional tax revenue. On the flip side, for every one million undocumented immigrants who are deported, public services stand to lose $8.9 billion in tax revenue.  
  • Nationally, providing access to work authorization to all current undocumented immigrants would increase their tax contributions by $40.2 billion per year to $136.9 billion.  
  • More than a third of the tax dollars paid by undocumented immigrants are toward payroll taxes dedicated to funding programs — like Social Security and Medicare — that these workers are barred from accessing.  
  • Similarly, income tax payments by undocumented immigrants are affected by laws that require them to pay more than otherwise similarly situated U.S. citizens; as one example, they are often barred from receiving meaningful tax credits like the Child Tax Credit or Earned Income Tax Credit. However, many states have made their versions of these credits more immigrant-inclusive in recent years.  
  • In PA and 39 other states, undocumented immigrants pay higher state and local tax rates than the top 1 percent of households living within their borders. 

“This study is the most comprehensive look at how much undocumented immigrants pay in taxes. And what it shows is that they pay quite a lot, to the tune of nearly $100 billion a year,” said Marco Guzman, ITEP senior policy analyst and co-author of the study. “The bottom line here is that regardless of immigration status, we all contribute by paying our taxes.”   

In Pennsylvania, $183,600,000 of the tax contributions are through sales and excise taxes, while $139,600,000 are through property taxes, and $185,300,000 are through personal or business income taxes.  

Marc Stier, executive director of the Pennsylvania Policy Center, said, “While this study is the most comprehensive analysis of taxes paid by undocumented immigrants, it is worth noting that it does not attempt to quantify broader impacts that flow from the increased economic activity created by these individuals. Taking those economic ripple effects into account would likely reveal undocumented immigrants to have an even larger significance to public revenues than is documented here.” 

Patty Torres, co-deputy director of Make the Road Pennsylvania commented on the study, “This study is another reminder that undocumented immigrants are contributing to our economies and our shared public services, and that immigration policy choices made in the years ahead will have significant consequences for public revenues.” Make the Road Pennsylvania is a partner organization with CASA and the Pennsylvanians Together campaign of the Pennsylvania Policy Center.  

“The value that immigrants offer to Pennsylvania is indispensable to the economy. According to ITEP, undocumented immigrants paid an average effective state and local tax of 8.9% toward funding infrastructure, services, and institutions in their home states like Pennsylvania, as measured relative to their incomes. This is juxtaposed by the most affluent taxpayers who pay just 7.2% in their home state,” said Daniel Alvalle, CASA’s Pennsylvania director. “More than that, immigrant families are part of our society, with everyone intertwined into one community: parents, teachers, children, custodians, healthcare workers, and so much more. Where we live is where we play and work. Our tax system should reflect the contributions that everyone makes, including immigrant workers.” 

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Join Us for Our Online Tax Justice Conversation!

By Blog Post

Dear Friends –

At Pennsylvania Policy Center we are continuing our call to reverse our upside-down tax system, and demand corporations and the ultra-wealthy to pay their fair share!

Please join the PA Megaphone team and our Pennsylvanians Together campaign for another conversation about tax justice leading up to Tax Day!

Pennsylvanians work hard, day in and day out, to take care of their families—but many of us are struggling to make ends meet while wealthy corporations and the 1% get richer and richer.

Join us at 12:30 PM on Friday, April 12 for a special Tax Day organizing event.

We’ll hear from some special guest speakers, including a Patriotic Millionaire and an SEIU home care worker to discuss why we must make our tax system more fair for working families. Then, PA Megaphone and Pennsylvanians United will share ways we can join together to advocate for tax justice online and offline.

This virtual event will take place as a Zoom webinar at 12:30 p.m. on Friday, April 12.
More details to be announced shortly! RSVP now to stay in the loop.
 

What is tax justice?

Tax justice means that ultra-rich individuals and wealthy corporations pay what they owe.

It means that their share of taxes enables us to provide the common goods we all need to create a growing, high-wage economy and a strong future for all of us.

And it means rejecting even more tax cuts for large corporations and the wealthy—tax cuts that create few jobs but undermine public education, the building and improvement of roads and bridges, and other public goods that create jobs.

Learn more about Pennsylvanians Together’s Tax Justice campaign here.

  • Dwayne Heisler, Campaign Director, Pennsylvanians Together

The Pennsylvania Policy Center aims, through its research and policy development, to create the tools that political officials, opinion leaders, grassroots organizations, and the people of PA need to expand our vibrant democracy, secure our freedom, and seek economic justice in Pennsylvania.

Press Release: Taxes in Pennsylvania Are Upside-Down

By Press Release

FOR IMMEDIATE RELEASE: January 10, 2024

 Contact: Kirstin Snow at Penn Policy Center snow@pennpolicy.org or Jon Whiten at ITEP jon@itep.org.

RELEASE: Pennsylvania’s Tax System Exacerbates Inequality, In-Depth National Study Finds

State Has the 4th-most Regressive Tax Code in the Nation

Harrisburg, PA — Pennsylvania’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. That’s according to the latest edition of the Institute on Taxation and Economic Policy’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, “The 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 of taxation for the bottom 20% of families arranged by income and in which those families’ taxes are more than twice the rate of the top 1%’s.”

In his response to the data, Senator Art Haywood (D-Montgomery and Philadelphia) said, “It is clear that the tax dollars of everyday Pennsylvanians are being vacuumed up to the richest. In the last decade, seven billion dollars have been vacuumed up to the richest in Pennsylvanians. We can change our taxation system so that everyday, hard-working people are no longer left behind.”

Also addressing the new report, Representative Chris Rabb (D-Philadelphia) said, “In a state where the bottom 60% percent of income earners on average pay at or nearly double the tax rate of what the richest Pennsylvanians pay, it’s time ALL residents pay their fair share.

“The Fair Share Tax Plan bill — HB 1773 — will correct the long-standing injustice of this #taxpolicy by increasing the tax on passive income from things like net profits, dividends, net gains derived from rents, royalties, patents and copyrights and net gains derived through estates and trust.

“As a result, HB 1773 will generate an additional $6 billion in revenues all while lowering or maintaining the tax rate for the vast majority of Pennsylvanians.”

The report’s key findings for Pennsylvania (See presentation from the event here.):

  • 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 4th-most regressive tax system in the nation.
  • Pennsylvania is one of 41 states that tax the top 1 percent less than every other income group, and it is one of 34 states that taxes its poorest residents at a higher rate than any other group.

Nationally, tax systems in 44 states exacerbate inequality by making incomes more unequal after collecting state and local taxes, while systems in six states plus D.C. reduce inequality, the report finds. On average, across the country, the lowest-income 20 percent of taxpayers face a state and local tax rate nearly 60 percent higher than the top 1 percent of households. The nationwide average effective state and local tax rate is 11.3 percent for the lowest-income 20 percent of individuals and families, 10.5 percent for the middle 20 percent, and 7.2 percent for the top 1 percent.

“When you ask people what they think a fair tax code looks like, almost nobody says we should have the richest pay the least. And yet when we look around the country, the vast majority of states have tax systems that do just that,” says Carl Davis, ITEP’s research director. “There’s an alarming gap here between what the public wants and what state lawmakers have delivered.”

PA-specific polling data on taxing corporations and the ultra-wealthy can be found here.

Recent policy changes have exacerbated or lessened regressivity in state tax systems, depending on the choices made by lawmakers.

About the report:

Who Pays? is the only distributional analysis of tax systems in all 50 states and the District of Columbia. The comprehensive 7th edition of the report assesses the progressivity and regressivity of state tax systems by measuring effective state and local tax rates paid by all income groups. No two state tax systems are the same; this report provides detailed analyses of the features of every state tax code. It includes state-by-state profiles that provide baseline data to help lawmakers and the public understand how current tax policies affect taxpayers at all income levels. More than 99 percent of all state and local taxes, measured by their revenue contribution, are included in the analysis.

About ITEP:

ITEP is a non-profit, non-partisan tax policy organization. We conduct rigorous analyses of tax and economic proposals and provide data-driven recommendations on how to shape equitable and sustainable tax systems. ITEP’s expertise and data uniquely enhance federal, state, and local policy debates by revealing how taxes affect people at various levels of income and wealth, and people of different races and ethnicities.

About Pennsylvania Policy Center:

 Through its research and policy development, the Pennsylvania Policy Center creates the tools political officials, opinion leaders, grassroots organizations, and the people of Pennsylvania need to expand our vibrant democracy, secure our freedom, and seek economic justice in Pennsylvania. Our work draws on a close connection to Pennsylvanians in every corner of the state, who tell us the problems they face, and robust and credible public policy research and analysis that identifies the sources of these problems and proposes solutions. These tools enable Pennsylvanians in and out of government to make their voices heard and create public policies that reflect their ideals and serve their interests.

Pennsylvania Policy Center is the state affiliate of the Center for Budget and Policy Priorities.

 

 

Pennsylvania Voters Believe Wealthy Individuals and Profitable Corporations Are Not Paying Their Fair Share

By Blog Post

Income and wealth are highly concentrated at the top in Pennsylvania, a situation that has worsened greatly in recent decades. Pennsylvania voters rightly believe that corporations and wealthy individuals aren’t paying their fair share to fund the government services and infrastructure we all depend on.

In November and December of 2022, Data for Progress conducted a survey of registered voters nationally to gauge voter support towards state action to ensure that profitable corporations and the wealthy are paying 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.

There is no question that Pennsylvania’s voters are supportive of statewide policies that require those at the top to pay their fair share. Voters are looking to Pennsylvania’s elected leaders to hold corporations accountable and create a system of equity in transparency in how much they actually pay in taxes. Pennsylvanians want public services, and especially fairly and fully funded schools, to be funded throughout the state and believe that wealthy Pennsylvanians should be paying their fair share to provide them.

Statewide Results: Percentage of Pennsylvania voters who agree with the following statements:

Profitable corporations and wealthy individuals are not paying enough in state taxes ……………82%
State lawmakers should do more to hold accountable corporations who avoid paying taxes. Corporate profits have skyrocketed and taxpayers need transparency about how much profit corporations make and whether they pay their fair share of taxes………………………………………………………84%

 

Click here for estimates of registered voter support for profitable corporations and wealthy individuals paying more in taxes by state House district.

Click here for estimates of registered voter support for profitable corporations and wealthy individuals paying more in taxes by state Senate district.  

Click here for estimates of registered voter support for profitable corporations and wealthy individuals paying more in taxes by US House District.

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

By Blog Post

In November and December of 2022, Data for Progress conducted a survey of registered voters nationally 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 Senate districts held by Democratic and Republican legislators are not all that great. Registered voters in both Democratic and Republican districts overwhelmingly support increasing taxes on profitable corporations and wealthy individuals.

The highest support percentage in Democratic districts was 92%, the lowest was 82%. The average support percentage in Democratic districts was 86%. The highest support percentage in Republican districts was 84%, the lowest was 75%. The average support percentage in Republican districts was 80%.

Support for Higher Taxes on Profitable Corporations and Wealthy Individuals by Senate District

wdt_ID DISTRICT Senator Support % Party
1 1 Nikil Saval 91% D
2 2 Christine Tartaglione 88% D
3 3 Sharif Street 89% D
4 4 Art Haywood 89% D
5 5 James Dillon 85% D
6 6 Frank Farry 81% R
7 7 Vincent Hughes 90% D
8 8 Anthony Williams 89% D
9 9 John Kane 83% D
10 10 Steven Santarsiero 83% D
DISTRICT Senator Support % Party

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

By Blog Post

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%. The highest support percentage in Republican districts was 84%, and the lowest was 71%. The average support percentage in Republican districts was 78%.

Support for Higher Taxes on Profitable Corporations and Wealthy Individuals by House District

wdt_ID House District Represenative Support % Party
1 1 Patrick Harkins 87% D
2 2 Robert Merski 84% D
3 3 Ryan Bizzarro 83% D
4 4 Jacob Banta 81% R
5 5 Barry Jozwiak 77% R
6 6 Brad Roae 77% R
7 7 Parke Wentling 83% R
8 8 Aaron Bernstine 75% R
9 9 Marla Brown 80% R
10 10 Amen Brown 90% D
House District Represenative Support % Party

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

By Blog Post

In November and December of 2022, Data for Progress conducted a survey of registered voters nationally 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 Pennsylvanian Congressional districts as well as state House and Senate districts

Click here for state-wide results.

Here we report data for two questions.

Taxing Wealthy Individuals & Profitable Corporations

When thinking about taxes in your state which fund public services, which of the following statements comes closest to your view, even if neither is exactly right?

Percent Agee: Profitable corporations and wealthy individuals are not paying enough in state taxes.

Corporate Tax Transparency

When thinking about state lawmakers requiring corporations to disclose their profits and how much they pay in taxes in your state, which of the following comes closest to your view, even if neither is exactly right?

Percent agree: Lawmakers should do more to hold corporations who avoid paying taxes accountable. Corporate profits have skyrocketed and taxpayers need transparency about how much profit corporations make and whether they pay their fair share of taxes.

The Results

Perhaps surprisingly, the differences between Pennsylvania Congressional  districts held by Democratic and Republican legislators are not all that great. Registered voters in both Democratic and Republican districts overwhelmingly support increasing taxes on profitable corporations and wealthy individuals.

The highest support percentage  districts for asking  profitable corporations and the wealthy individuals to pay more was 91%,  lowest was 80%. Support in Democratic districts ranged from 84% to 91%. Support in Republican districts ranged from 80% to 85%.

The highest support percentage  districts for requiring corporate transparency was 93%, the lowest was 80%,  Support in Democratic districts ranged from 84% to 93%. Support in Republican districts ranged from 80% to 85%.

Support for Taxing the Ultra-rich and Wealthy Corporations

wdt_ID PA Congressional District Member of Congress Party Corporations and Wealthy Should Pay More Support: More Corporate Transparency
1 1 Brian Fitzpatrick R 84% 83%
2 2 Brendan Boyle D 89% 88%
3 3 Dwight Evans D 93% 91%
4 4 Madeleine Dean D 86% 83%
5 5 Mary Gay Scanlon D 87% 84%
6 6 Chrissy Houlahan D 85% 83%
7 7 Susan Wild D 84% 82%
8 8 Matt Cartwright D 85% 83%
9 9 Daniel Meuser R 80% 76%
10 10 Scott Perry R 82% 79%
PA Congressional District Member of Congress Party Corporations and Wealthy Should Pay More Support: More Corporate Transparency

 

PA House Passes Proposals to Reduce Taxes for Working People

By Blog Post

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 state’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 taxes at lower rate than low- and moderate-income families, these proposals are a big step in the right direction. We are grateful to the Democratic House leadership for moving these proposals to the floor and to both the Democrats and Republicans who voted for them.

The first proposal passed today was an expansion of the Child Tax Credit, first enacted last June, in the budget for the current fiscal year. The Pennsylvania Child Tax Credit piggybacks on the federal child and dependent tax credit. The initial version of the tax passed last year gave Pennsylvania taxpayers with children a tax credit equal to 30% of the employment-related child and dependent care expenses claimed on a family’s federal tax return of up to $3,000 for one dependent or $6,000 for two or more dependents. The new bill gradually expands the credit to 50% of the child and dependent expenses with a cap of $5,000 for one dependent and $10,000 for two or more. The child and dependent tax credit benefits all families who pay for child and dependent care, but because those costs are a bigger burden on low- and moderate-income families, and because of the cap on allowable costs, the tax credit provides extra help for families at the bottom and middle of the income scale. Representative Tina Davis (D-Bucks) was the prime sponsor of the legislation, which has also been championed by Representative Melissa Shusterman (D-Chester) in recent years.

The second proposal passed today was a state Earned Income Tax Credit (EITC). This is a proposal that the Pennsylvania Budget and Policy Center has supported for a number of years. The state Earned Income Tax Credit piggybacks on the Federal Earned Income Tax Credit, which is one of the major programs that lift families out of poverty in the United States. The state EITC will give Pennsylvania families 25% of what they received under the federal credit. Families will have to choose between receiving this credit or the credit allowed under the existing tax forgiveness program. The Pennsylvania Policy Center (PPC) estimates that a new state EITC will benefit families with incomes roughly up to $22,000 in income more than the existing tax forgiveness program. (PPC will present a full analysis of the new proposal soon.) Representative Christina Sappey (D-Chester) was the prime sponsor of the legislation, which has been championed by Representative Sara Innamorato (D-Allegheny) in recent years.

Last week the House passed HB 1100, an expansion of the Property Tax / Rent Rebate Program, which reduces property taxes for seniors and people with disabilities. This legislation, which was proposed by Governor  Josh Shapiro in his budget address, raises the income limits for the Property Tax and Rent Rebate Program from $35,000 for homeowners and $15,000 for renters to $45,000 for both homeowners and renters. In addition, under the legislation, people eligible for the program will see the maximum rent rebate increase from $650 to $1,000 for taxpayers with incomes below $8,000 with smaller, but substantial, increases for taxpayers with higher incomes. The legislation also adds a cost of living adjustment that will allow the income limits and benefits to increase with inflation in the future. Based on an analysis prepared by the Institute for Tax and Economic Policy, PPC expects that 10.5% of taxpayers and 15.8% of taxpayers with incomes below $82,000 will see their taxes cut due to the expansion of the program. Less than 4% of taxpayers with incomes above $82,000 will receive a tax cut. This proposal was sponsored by Representative Steve Samuelson, (D-Northampton), Democratic chair of the House Finance Committee.

The House is also expected to pass HB 1138 to repeal the gross receipts tax and sales and use tax on wireless cell phone services (HB 1138). This proposal was also part of Governor Shapiro’s budget and is sponsored in the House by Representative Ben Waxman (D-Philadelphia). Like most other gross receipts and sales taxes, this one is regressive in nature in that it takes a larger share of income from those with low incomes than those with high incomes. That is especially true when one considers that owning a cell phone is no longer optional for most working people and those who care for dependents.

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