Report: Wolf’s tax plan hits all
HARRISBURG — The Independent Fiscal Office says that Gov. Tom Wolf’s proposed tax changes would result in at least a small overall tax increase for Pennsylvanians in all income ranges but that the cost would fall much more heavily on higher-income residents.
Residents with incomes of more than $100,000 would bear nearly two-thirds of the increased tax burden, through both tax bills and indirect costs such as price increases, and those with incomes below $50,000 would pay about onetenth of the increased cost, according to a report released Thursday by the IFO, a nonpartisan agency similar to the Congressional Budget Office.
The IFO found a small net increase for residents with incomes below $25,000 despite significant property tax and rent relief because of increases in tobacco and sales taxes and smaller increases in personal income tax and, because of the proposed severance tax, utility prices.
Mr. Wolf has called for a broad package of changes: increasing the sales tax rate from 6 to 6.6 percent while expanding the base of products and services taxed; increasing the personal income tax rate to 3.7 percent from 3.07 percent; dramatically increasing state-funded relief from school district property taxes; cutting the corporate net income tax rate; increasing the cigarette tax; and imposing a tax on the extraction of natural gas.
The package of changes would increase net state and local tax revenues by $5.2 billion by the fiscal year beginning in July 2019, the IFO found.
The Wolf administration disputed the claim that all income brackets would pay more under the governor’s plan.
On a conference call with reporters Friday, John Hanger, Mr. Wolf’s secretary of planning and policy, focused on the changes proposed for the property tax, sales tax and personal income tax.
“We remain confident that the changes the governor’s proposing to those three taxes would benefit most Pennsylvanians, and certainly homeowners up to $100,000 and renters up to $50,000,” he said.
Mr. Hanger suggested uncertainty in the IFO’s attempt to
account for the effects of other changes, such as those proposed for the cigarette tax and the severance tax.
“They are trying to expand the analysis to areas where the data sets are very weak and very difficult,” he said.
The office of the Republican chairman of the House Appropriations Committee, Bill Adolph of Delaware County, said the report contradicts Mr. Wolf’s claim that his policies would reduce the bill for some taxpayers.
In a statement, Mr. Adolph called the report a “telling portrayal of how the governor’s massive tax increases will force all Pennsylvania taxpayers to pay more for everything from day care, nursing home care, utilities, newspapers and more, yet fail to deliver on the net tax decreases promised by the governor.”