Pressured by a looming June 30th budget deadline and Gov. Ed Rendellâ€™s economic team, House Speaker Keith McCall of Carbon County announced yesterday his support for a 16% increase to the state income tax. Citing concerns over Pennsylvaniaâ€™s $3.2 billion dollar deficit, McCall had few words to say on why he finally broke his budget silence. â€œMy concern is it’ll equate to significant property tax increases if we cut our way out of thisâ€?, said McCall. The reality is that McCallâ€™s fear of property tax increases seems rather unfounded, given that the proposed state budget will already increase public education subsidies by 12%.
In an attempt to remain in good graces with Pennsylvania taxpayers, McCall also called for a 70% decrease in the corporate tax, placing it at roughly the same level as the proposed income tax according to CapitolWire (subscription). While this is a good move for Pennsylvania’s economic competitiveness, this proposal could force all multi-state companies operating within Pennsylvania to pay the tax, regardless if their profit is generated elsewhere.
A Democrat from a largely rural and conservative district, McCall seems to desperately be trying to shift the focus away from why his constituents will be seeing such a large increase in their state income tax. Pennsylvania is one of the few states with both state and local income taxes, giving Pennsylvania the 16th highest per-capita state and local income tax revenue in the nation. More importantly, Pennsylvania has the 11th highest overall tax burden.