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Pennsylvania House of Representatives
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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: April 19, 2017 11:09 AM
From: Representative Seth M. Grove
To: All House members
Subject: Personal Income Tax Reduction
In the near future, I plan to introduce legislation to reduce the personal income tax burden on Pennsylvanians and small business owners. Despite having a personal income tax at 3.07%, the Commonwealth’s overall tax burden for state and local taxes is still one of the highest in the nation. As a result of this cumulatively high tax burden, the Commonwealth’s economy has struggled to create jobs compared to other states.

Starting in 2020, if the state experiences an increase in revenue by more than 3%, the legislation would require the state to begin to reduce the personal income tax burden for Pennsylvanians the following year. This reduction would be calculated by finding the difference between the growth in the state’s revenues and the growth in the state’s public pension costs along with the increase in Medicaid costs.

This proposal reflects conversations occurring in state legislatures across the country as Michigan’s House Tax Policy Committee voted to eliminate the income tax over 39 years. At the same time, states such as Texas operate without using an income tax for revenue. This being said, unlike the original proposal passed out of Committee in the Michigan House of Representatives, my legislation takes into consideration the Commonwealth’s obligation to pay its bills. More importantly, this bill would ensure the Commonwealth, even when reducing its tax rate, still meets its contracted pension obligations and protects our most vulnerable citizens.

Additionally, this legislation allows the Commonwealth to prudently craft its budget by only reducing the personal income tax following a year of strong revenue growth. This allows the state to invest into its economy and return money to the taxpayer. Furthermore, by targeting only the difference between the cost drivers in our budget and the growth in revenue, the state can continue to cover its obligations while assisting taxpayers and small business owners.

Please join me and co-sponsor this legislation to provide tax relief to working Pennsylvanians and small business owners while honoring the Commonwealth’s commitments. Should you have any questions please contact Jordan Grant by phone at 717-767-3947 or by email at Jgrant@pahousegop.com.

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Introduced as HB1355