Log In


Reset Password

Governor’s 2021-22 tax proposal ‘dead on arrival’

Every February, Gov. Tom Wolf issues his annual budget address that lays out his high-minded vision of carrying the commonwealth and its residents to a better place in life.

But, wink-wink, we know it is a game, a sort of cat-and-mouse exercise. At the end of the day, the thousands of words that the governor utters are just that - words. By June 30, the deadline for having a budget in place, his grandiose views and proposals bear little resemblance to what becomes law.

As a lame-duck governor, since his limit of serving two terms will be over at the end of 2022, Wolf has the luxury of proposing some far-out and, some might say, off-the-wall measures.

Being in the midst of a worldwide pandemic, I would have thought that the governor would have played it safe by coming up with an austere, hold-the-line budget with no tax increases and no other big spending proposals.

Instead, he has proposed a $37.3 billion budget that is roughly 12% higher than this year’s and which features a significant increase in the personal income tax.

Right now, the tax rate is 3.07%. It doesn’t matter whether you make $50,000 or $5 million a year, you still pay the same tax rate. Some refer to this as a “regressive tax,” because it affects lower income residents disproportionately. It’s like the 6% state sales tax. It doesn’t matter what your income is - you still pay 6% on taxable items.

Some might ask: “Well, if the flat income tax is a problem, why not go to a graduated income tax such as the federal government and some other states use?

The Pennsylvania constitution does not allow it. To go in that direction would require a constitutional amendment, and to this point, the General Assembly has no stomach to open this can of worms.

Wolf is proposing that the income tax be raised from 3.07% to 4.49%, a stunning 46% increase, but under Wolf’s plan it would reduce the tax burden on families earning $84,000 or less.

Wolf is suggesting increasing the allowances for tax forgiveness to $15,000 for single filers, $30,000 for couples and $10,000 for each dependent. Those who have income below these levels would have total tax forgiveness.

Predictably, most Democrats praised the proposal because education would be the big winner with $1.35 billion more being earmarked for this category. Some key Republicans characterized the tax-increase proposal as “dead on arrival.” Republican lawmakers in our area did not straddle fences in their disdain for Wolf’s proposals.

Sen. David Argall, R-Schuylkill, is one of the legislators who branded Wolf’s tax-increase proposal as “dead on arrival.” “A family that operates a diner in Pottsville or Pine Grove can’t afford paying 50% more in income tax. Haven’t they suffered enough? There are no Republican votes in the Senate for these tax increases, and I doubt that many Democrats will support it once they hear from their constituents,” Argall said.

Sen. Mario Scavello, R-Northampton and Monroe, called it an “economy killer.” “It will wreak havoc on working families who are already burdened with current taxes. We need to commit to moving forward with a budget that is fiscally responsible,” Scavello said.

Rep. Jerry Knowles, R-Schuylkill/Carbon, said if the governor’s budget were to pass, it would cause unemployment and even more business closures. “It would significantly raise taxes on middle-class Pennsylvanians, small businesses and critical infrastructure. Who will pay the bill for his plan? You, the taxpayer,” Knowles added.

Rep. Doyle Heffley, R-Carbon, called many of the governor’s budget proposals, not just the rise in taxes, “non-starters.” “People are not looking for handouts. They just want to be able to safely go back to work, and the governor can help them do that. Instead, he talked about tax increases, when the focus should be on vaccine distribution and safely reopening Pennsylvania’s economy.”

Despite their differences, Heffley said he is willing to work with Wolf to reach a compromise agreement by the June 30 budget deadline.

Most Democrats voiced support for Wolf’s mission, although some chose their words carefully because they know that their constituents will not swallow tax increases. Rep. Mike Schlossberg, D-Lehigh, said he praises Wolf for “seeking to make a more equitable society. America is not about guaranteeing outcomes, only opportunities.”

Maybe so, but with the economic realities facing us during this pandemic, maybe going big should be left to better times.

By Bruce Frassinelli | tneditor@tnonline.com