By: Andrea Sears
HARRISBURG, Pa. — State lawmakers and public policy advocates announced a tax plan Wednesday that would raise new revenue while lowering taxes for about half of all Pennsylvania taxpayers.
Like a version introduced last year, the proposed “Fair Share Tax” would increase taxes on wealth, such as dividends and capital gains to 6.5 percent. But Marc Stier, director of the Pennsylvania Budget and Policy Center, said this year the plan calls for reducing taxes on wages and interest.
“What this means is that 85 percent of Pennsylvania taxpayers will see either no change or a reduction in their taxes, and only about 15 percent will see an increase,” Stier said, “and that’s mostly in the top 5 percent.”
The Fair Share Tax would generate about $2 billion a year in new revenue for the state.
According to Stier, new revenue is needed to address the two deficits facing Pennsylvania: a $3 billion budget deficit, and an investment deficit.
“We’re not spending enough on public education and that’s why we have such unequal funding of schools, on higher education where we’re fourth from the bottom, on protecting our environment and on providing human services to people,” he said.
He said that even after the increase, Pennsylvania’s top 1 percent still would have a lower effective tax rate than residents of any of the surrounding states.
Although many lawmakers may oppose raising taxes at all, Stier pointed out that since 1979, most Pennsylvanians have seen their income increase by only 12 percent, while the income for the top one percent has gone up by 125 percent.
“If you’re not going to tax the people who are making more money than they have in the past, you’ll have an unfair tax system and you won’t raise the revenue you need to provide for the common good,” Stier said.
Governor Tom Wolf’s budget plan for the coming fiscal year calls for $1 billion in new taxes on corporations and gas drilling, and $2 billion in structural reforms.