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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.  

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

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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