Pennsylvanians Deserve True Fairness
Note: This commentary was first published in the Bloomsburg Press-Enterprise.
“We’ve got to make sure we have a level playing field,” said Governor-elect Wolf during his victory speech on election night. He is exactly right. But leveling the playing field starts with government treating those it serves equally under the law, not penalizing some for the benefit of others.
Everyone deserves an equal opportunity to pursue success in our state. While Mr. Wolf’s intentions echo these noble sentiments, many of his proposals fall far short of his vision.
For example, his “progressive” personal income tax proposal contradicts this goal of a more just Pennsylvania.
Our state currently has a single personal income tax applied to income above a certain level. As a practical matter, this is the fairest system possible. Those who earn more pay more, and those who earn less pay less, but everyone pays the same percentage of their income.
Under Wolf’s progressive income tax system, higher income earners must send a larger percentage of their income to Harrisburg. That’s not only unfair, but it hurts many of the people it is intended to help.
If a business owner starts seeing successful growth, the reward under Mr. Wolf’s tax system could be a huge jump in their tax rate—as much as a 188 percent increase. This is harmful to the business owner, who now has less money to reinvest, and to current and potential employees, who will see fewer job opportunities as a result.
Hard work and success should be rewarded, not punished. Government should be encouraging business owners to serve their communities well, not further burdening them when they do so successfully. A progressive income tax requires government to treat people unequally—a clear violation of the fairness principle.
Unfortunately, Mr. Wolf’s unfair and inequitable proposals don’t end there. The centerpiece of his “Fresh Start” plan was an extraction tax on natural gas. Like the progressive income tax, this is patently unfair. No other industry would be required to pay this tax.
In essence, Mr. Wolf is singling out the gas industry—which pays all the taxes common to every other industry in the state—to find more money to spend. Does that sound like equality to you?
Pennsylvania’s natural gas industry has improved life for tens of thousands of people around the state like Randy Walker, a farmer in Armstrong County. Thanks to the leasing bonus and royalty payments he receives courtesy of the natural gas boom, Randy says, “Life is a lot easier now for my wife and me.” Imposing a severance tax on natural gas is sure to hurt people like Randy.
What’s more, homeowners across the state will see rising heating bills as taxes push the cost of natural gas higher. For families on a tight budget, the result would be crippling.
During the campaign, Mr. Wolf supported a five percent extraction tax to boost public school funding—the top issue of the gubernatorial election. However, it is in the area of education where Mr. Wolf’s proposals are most unfair.
Programs like the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) provide families the option to choose a good school for their child at a fraction of the cost of a traditional public school. While the average EITC scholarship is $1,100, the average public school (not including charter schools) spends approximately $14,600 per student.
Yet, instead of expanding these low cost schooling options that provide a lifeline to students, Mr. Wolf has proposed a dramatic increase in education spending, which evidence shows does not improve student performance.
Moreover, Mr. Wolf has called for education cuts to charter schools, which already receive less funding per student than traditional public schools. Why should charter school students bear the brunt of education cuts while traditional public schools receive more funding?
If we can help students attend a good school—regardless of their zip code—at a lower cost to taxpayers, isn’t that the fairest option to pursue?
Imposing artificial roadblocks to success—whether through higher taxes that punish job creators, targeting an industry for unique taxes, or restricting choice in education—will lead to a Pennsylvania that is less free and less fair.
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Bob Dick is a policy analyst at the Commonwealth Foundation (CommonwealthFoundation.org), Pennsylvania’s free market think tank.