State House Sound Bites

Capitol reporter Katie Meyer covers Pennsylvania politics and issues at the Pennsylvania state capitol.

The State House Sound Bites Podcast is now called State of the State and is a part of PA Post, a digital-first, citizen-focused news organization to hold Pennsylvania’s government accountable to its citizens.

An income tax proposal that threads the needle?

Written by Mary Wilson, Former 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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