The tax hikes included in the revenue plan passed by the Senate (26-24) and supported by Gov. Wolf amount to nearly $600 million in total new taxes for next year. Putting that in context based on our population, that comes to $180 in additional taxes per family of four.
In the first year of the tax increase, Pennsylvania’s economy would see 3,600 lost jobs, as well as $142 million in lost investment and $932 million less in disposable income.
The Commonwealth Foundation worked with the Beacon Hill Institute to apply an economic modeling program to analyze the overall impact of proposed tax changes. Economists at Beacon Hill developed the Pennsylvania State Tax Analysis Modeling Program (PA STAMP) to evaluate the dynamic impact of proposed tax changes. The analysis showed the devastating impact of the tax hikes.
These are just some of the important numbers we shared with lawmakers yesterday, as the Taxpayers' Caucus held a forum to hear from taxpayers about the impact of new and higher taxes on their families and businesses. You can view a summary of these comments from ABC 27 or from Fox 43.
There are more key numbers for lawmakers to consider.
The higher taxes passed by the Senate are on top of Pennsylvania’s already excessive tax burden. Our overall state and local tax burden rank 15th highest in the country, according to the Tax Foundation. WalletHub estimates that for a family with the median household income, Pennsylvania’s tax system imposes the 11th highest tax burden.
Most of these taxes will fall directly on Pennsylvania families. The 2.7 million homeowners using natural gas will see higher heating bills this winter. Cell phone bills and electric bills will also rise if the gross receipts tax increases become law. This is about as “broad-based” a tax as you could design, affecting almost every family in Pennsylvania, except perhaps some Amish households.
Some of these tax hikes will be imposed on businesses and passed on through higher costs and lower wages. The Independent Fiscal Office, for instance, writes that “most of the tax is pushed forward into higher prices and borne by natural gas consumers,” estimating that 7 percent of a natural gas severance tax will be borne by lease holders, and 93 percent by consumers (both Pennsylvania residents and non-residents).
A minority of the Republican caucus (14) joined with 12 Democrats to pass the revenue plan 26-24 on July 27. Roll call can be viewed here.