State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

An income tax proposal that threads the needle?

Written by Mary Wilson, Capitol Bureau Chief | Jul 29, 2014 8:05 PM
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Photo by Mary Wilson / witf

Democratic gubernatorial candidate Tom Wolf is calling for a progressive state income tax that targets the wealthy. But he'll have to get creative to make it feasible.

The state constitution requires taxes to be uniform, and the state Supreme Court has interpreted that to mean no special tax rates for different income levels. That should rule out progressive income taxes. When former Gov. Milton Shapp approved such a tax change, the state's high court struck it down.

That's not to say all Pennsylvanians pay the same rate of tax on their income. A variety of deductions and credits are in the state's tax code. Some people, due to income and family size, see their income taxes reduced or completely refunded by the state.

"We have income tax forgiveness in Pennsylvania," said Wes Leckrone, political science professor at Widener University. "Everybody in effect doesn't pay the same rates of income taxes in Pennsylvania."

But still, to get around the state constitution's restrictions, Wolf's campaign says he would raise Pennsylvania's current 3.07 percent income tax rate and offer all taxpayers the same exemption of income. The wealthier someone is, the more income would fall above that exemption level, and the more tax he or she would pay. The campaign isn't releasing the proposed tax rate or the exemption level.

Wolf has said the increase to income tax revenue would be used to drive down local property taxes.

Thomas Baldino, a political science professor at Wilkes University, said it's smart for Wolf to link income tax to much-reviled local property taxes. But he questioned how well it would resonate with voters. Even when income equality is a hot topic, tax proposals don't lend themselves easily to campaign television ads.

"Sure, we all agree that we need tax reform, but when you get into the details, it gets extremely complicated," Baldino said. "And anytime there's tax reform, or any kind of reform, winners and losers are created."

Published in State House Sound Bites

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Comments: 1

  • genebrown img 2014-10-28 00:30

    This sounds interesting. I hope these fund will be used in a local projects and constructions for all the people in the community. I have read an article about 75 percent of Americans who filed tax returns got a refund. The average amount of those refunds was around $2,800. While many say they will use that money sensibly, recent data show a lot of it is used for splurges. How do you plan to spend your 2012 tax refund? With personal loan, you can afford to pay your taxes this year.

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