Lawmakers Must Reject Tax Hike of Christmas Past

New Tax Plan Would Hit Working Families of all Income Groups

December 18, 2015, HARRISBURG, Pa.—Nearly six months into the state budget impasse, Gov. Wolf and some lawmakers reportedly want to make Pennsylvania families send even more of their paychecks to Harrisburg. For hardworking families, this “solution” to budget gridlock comes at a high—and painful—cost.

“The state and local tax burden for a family of four in Pennsylvania is already an astounding $17,000,” stated Matthew Brouillette, president and CEO of the Commonwealth Foundation. “Raising the state income tax will again hit working families struggling to pay their bills.”

Today, 35 states have either a lower starting rate or no income tax on wages, according to the Tax Foundation. Although Pennsylvania’s personal income tax rate is considered among the lowest in the nation, this does not take into account seven states with no income tax and two that tax only investment earnings. Additionally, the commonwealth’s flat tax is one of the highest bottom tax rates in the country. 

Upping the income tax rate would impact more than 5 million workers and 775,000 small business owners—who employ approximately half of the state’s workforce.

“Twelve years ago, the legislature sprung a 10-percent income tax hike on Pennsylvanians just before Christmas—and massive spending and borrowing followed,” Brouillette continued. “Let’s not repeat the tax hike of Christmas past. Getting a budget done is important, but not at the expense of getting it done right.

“Pennsylvania’s economy already lags behind other states in income, job, and population growth. Higher taxes will drive people away and drain the state of financial resources. We urge Gov. Wolf and the legislature to abandon broad-based tax  hikes. Instead, they should approve a rescue budget to bring immediate relief to schools and human service agencies, while continuing to negotiate a compromise that benefits—not burdens—Pennsylvania families.”

Matthew Brouillette is available for comment. Please contact Gina Diorio at 862-703-6670 to schedule an interview.

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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.