For the last few weeks we have been inundated with discussion of Gov. Wolf’s proposed budget legislation in the newspaper, on TV and social media. Gov. Wolf promises to rebuild the middle class in Pennsylvania with his “gimmick-free budget.” He plans to balance the state budget by cutting property taxes and increasing the sales tax and income tax rates.
Pennsylvania has not seen an income tax rate increase since 2004. Coincidentally, that was also when then Gov. Rendell proclaimed that casinos would be responsible for the largest property tax relief in Pennsylvania. Well, here we are a little over 12 years later, and property taxes in PA are back or above those 2004 levels.
We had the chance to discuss Gov. Wolf’s proposed plan with Channel 69 News Anchor Jaccii Farriss and why Pennsylvania is ranked in the top 10 for states that pay the highest taxes. You can view the TV interview here.
Here is the text of Ms. Farriss’s interview:
Tax time can really sting for folks who find themselves in the red, but when it comes down to who pays the most, you might be surprised.
Pennsylvania is in the top 10 for states that pay the highest taxes, according to a pair of new studies. According to a study done by MoneyRates.com, Pennsylvania ranked in the top 10 states with the highest per capita federal tax burden. Why? Pennsylvania has a larger population, with some of the nation’s highest earners.
In another study, Wallethub.com broke it down in terms of state taxes. The numbers stay pretty consistent with the federal figures, with one noteworthy item. Lower income Pennsylvanians pay a higher percentage of their income in taxes than other residents, nearly 12 percent, while middle income residents pay roughly 10 percent and higher income individuals pay around 9 percent.
So how does this happen? “The reason our taxes are high, I believe, is because we live in the northeast. We expect a lot from our government, and things cost more here than they do in Alabama,” said Andrew Werner, a certified public accountant with Werner and Company in Allentown.
Werner said it’s simple economics. Because lower income residents have less money, they use a bigger percentage of it for taxes.
Pennsylvania Gov. Tom Wolf is trying to ease the tax burden on residents by cutting property taxes and offering $3.8 billion in relief, but at the same time, he is proposing to raise the sales tax.
While food, clothing and prescriptions would be exempt, Kristofer DePaolo, a certified public accountant, said the higher tax could be a hardship for lower income Pennsylvanians.
“Anything of necessity that you or I would spend out money on because their income is a lower, a greater percentage is spent on that compared to a high income earner,” said DePaolo.
A spokesperson for Wolf said the governor wants to ease the blow for some residents by raising the income tax exemption from $32,000 to $36,500 for a family of four.
In case you were wondering, Pennsylvania is one of five northeast states to make the top 10 lists for taxes paid per capita.
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