The Independent Fiscal Office Thursday issued its required analysis of Gov. Wolf’s budget proposal saying all income groups will see higher taxes if the proposed package with higher income residents paying significantly more if his budget is enacted.
“(T)he analysis finds that high-income residents will bear most of the economic incidence of tax changes that are not exported to non-residents or offset by the federal tax system. The top two income groups with income above $100,000 bear nearly two-thirds of the tax incidence. By contrast, those with income below $50,000 bear roughly one-tenth of the tax incidence.
“Despite significant property tax and rent relief, the low-income group realizes increases in tobacco and sales taxes, and modest increases in personal income and severance tax through higher utility prices. For the highest income group, property tax relief is offset by higher sales and personal income taxes. For that income group, the personal income tax amount ($658 million) includes a federal income tax offset of $200 million.”
Rep. Bill Adolph (R-Delaware), Majority Chair of the House Appropriations Committee, reacted to the report saying, “The IFO’s report on the governor’s proposed tax increases is 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.
“The report makes a particularly important observation when it says ‘[t]he analysis finds a net tax increase for all groups, including a small net increase for the lowest income group.’ This is significant because it directly contradicts claims made by the governor in his budget speech on March 3 and reiterated again and again during our budget hearings by his top staff.
“The governor told Pennsylvania residents: ‘My budget actually reduces the total tax burden on average middle-class homeowners by 13 percent.’ The IFO’s analysis shows taxpayers that when taken as a whole, the governor’s proposed budget is a huge tax grab that increases state spending by 16 percent and fails to deliver on the promises of net tax reductions being touted by the governor.
“As we work to get a sustainable budget signed into law by June 30, we owe it to the taxpayers of Pennsylvania to be completely transparent about how they will be impacted by the issues we address Harrisburg.”A copy of the IFO report is available online.
NewsClip: Report Disputes Wolf’s Tax Break Claims