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LEHIGH VALLEY WEATHER

GUEST VIEW Tax reform would be lifeline for struggling Pennsylvania families

A new legislative session has begun in the General Assembly and a new governor has taken office.

Gov. Josh Shapiro has pledged to work together to move Pennsylvania forward and we hope to see that bipartisan spirit during the upcoming state budget talks.

The Shapiro administration, House of Representatives and state Senate have an opportunity to provide some tax relief for struggling families overburdened by the rising cost of inflation.

It’s no secret that Pennsylvania lags behind other states economically. Addressing our tax policies would go a long way toward improving our fiscal footing and making Pennsylvania attractive to the families and businesses that are its economic heartbeat.

The need is urgent.

According to North American Moving Services, Pennsylvania is among the top five states for outbound migration, and it has been in the Top 5 since 2011.

While people choose to move for a variety of reasons, there’s no doubt that economic factors contribute to these decisions. The situation becomes clearer when you look at where people move. Florida, Arizona, Tennessee, and the Carolinas enjoyed the most inbound migration. Florida and Tennessee have no income tax. Arizona recently implemented the lowest flat tax in the country.

In a time of spiraling inflation, tax rates matter.

In one survey nearly three-quarters of American earners with an income between $30,000 and $100,000 say their earnings are falling behind the cost of living.

And, in another conducted by the Consumer Finance Protection Bureau, 58 percent of those making $20,000 or less had a hard time paying bills or expenses, while 47 percent of those making between $20,000-$50,000 say they, too, have a hard time.

Clearly, families are hurting. This financial pain combined with disappointing job growth, almost certainly causes people to leave Pennsylvania.

While states have limited influence on inflationary policies that come from Washington, lawmakers in Harrisburg can do something to help Pennsylvanians keep more of their hard-earned money and improve the state’s economy.

By bringing down Pennsylvania’s Personal Income Tax rate from the current all-time high of 3.07 percent to a more reasonable 2.99 percent, Harrisburg can offer families much-needed relief.

This can be done without endangering any funding to fundamental state programs and services. Pennsylvania currently has a record-high Rainy Day Fund of just short of $5 billion, an achievement touted by former Gov. Tom Wolf.

But what the former governor forgot to mention is that unlike other states that built up large surpluses - including Georgia, Idaho, Iowa, Indiana, Kentucky, Mississippi, New York, South Carolina, and Utah - Pennsylvania has lagged in enacting tax reductions that would help us compete.

In addition, Shapiro should endorse a reduction in the state’s death tax, which currently stands at 4.5 percent for lineal descendants and 12 percent for siblings.

Americans pay income taxes their entire working lives and retirees will pay taxes on their hard-earned retirement accounts.

Taxing inheritances only serves to discourage savings and decimates intergenerational wealth - something that low-income and minority families deserve the chance to create.

Pennsylvania is one of only 18 states that levies a death tax. Not even California, with all its various budgeting problems, has one.

Together, these tax relief reforms could create an economic environment that is more family-friendly.

It would also allow the governor to fulfill his campaign promise to work as a bipartisan leader.

After all, as he said in an interview, “We need to create real freedom and real opportunity for all Pennsylvanians.”

We agree.

Now is the time to quash partisan tensions by putting Pennsylvania families first. A failure to do so would reinforce the status quo, with residents continuing to flee an anemic Keystone State economy.

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State Rep. Ryan Mackenzie represents the 187th Legislative District which includes the townships of Heidelberg, Lower Macungie, Lynn, Upper Macungie (Districts 3, 7 and 8), Washington and Weisenberg; and the boroughs of Alburtis and Macungie in Lehigh County.

Co-writer Ashley Klingensmith is state director at Americans for Prosperity, Pennsylvania.