Budget hearings took place on Tuesday with lawmakers as the Pennsylvania state has to deal with a government that faces a multibillion-dollar revenue gap. This is hangover from the ongoing COVID-19 pandemic and Governor Tom Wolf’s proposal to raise the state income tax.
Wolf’s proposal is defended by Democrats. This was at the first House Appropriations Committee hearing. It is structured to shift the burden to the higher earners. Therefore, cut taxes for lower-income workers in a state with one of the most regressive tax structures.
They said federal aid, in addition, if it does come, will not fix the state’s long-term deficit. While, in fact, Wolf’s proposal could also fairly fund public schools and thereby opening the door to school property tax cuts in some districts.
Controlling the legislature are the Republicans. They are questioning whether Wolf’s tax proposal is tailoring to lower taxes on lower-income households. Then raise them in higher-income households whether it is constitutional. That is under case law. It does interpret the state constitution to require a flat income tax rate. Versus a graduated rate.
Representative Natalie Mihalek, a Republican, from Alleghany County, has said it was now the time to look at raising the tax-forgiveness exemption. This is a main element of Wolf’s income tax plan.
Republicans have signaled opposition to raising the tax period. They warn it will hurt people that are still hurting from the pandemic. One, in particular, is Representative Jonathan Fritz, Republican-Wayne. He said some people who do qualify 100% tax forgiveness wouldn’t actually fill the form necessary to get the refund. Then, they could get hit with the increase anyway.
In fact, others have said Wolf’s proposal won’t do anything to cut school property taxes or help the poor.
Going from higher taxes to actually getting out there and doing something that is more important is the real issue. The goal is to help those who are poor who have children who are living below the poverty line. In fact, there are a lot of things we can do. Yet, creating a tax increase isn’t one of them, ” House Appropriations Committee Chairman Stan Saylor, Republican-York, told Wolf’s revenue secretary, Daniel Hassell.