|Posted:||June 16, 2017 10:29 AM|
|From:||Representative Jason Ortitay|
|To:||All House members|
|Subject:||Personal Income Tax Cut Legislation|
|As the General Assembly begins to finalize a budget for the coming fiscal year, the legislature must again figure out how to handle a budget deficit. The reason for the deficit is simple as the state’s economy continues to grow slower than government spending. A fact unfortunately demonstrated by the Commonwealth’s anemic .01% GDP grow last year.
In years past, the default attitude for state government has been looking for ways to “plug” the hole in the state’s budget through the use of nontax or new tax revenue. However, even after increasing taxes on hard working Pennsylvanians, the state’s fiscal health has not improve. As other states, such as Illinois, have shown increasing taxes does not fix the budget rather it only serves to weaken the economic growth. The unintended result, as demonstrated in the current fiscal year, is that higher taxes serve to only further destabilize the budget rather than improve it.
With fiscal evidence residing from the income taxes collected in 2014, our state brought in approximately $357 billion in total taxable income. Reducing the personal income tax rate from 3.07 percent to 2.82 percent would give Pennsylvanians back $892.7 million to invest back into the economy.
By allowing Pennsylvanians to keep more of their hard earned money, they can invest it back into the economy. The resulting growth in the state’s economy naturally generates more revenue to balance the budget.
Perhaps the biggest economic impact from this proposal comes from its impact to small business owners who comprise more than 50% of job creation in the Commonwealth. These business owners do not pay a corporate income tax instead they file their taxes as personal income. As a result, the reduction in the personal income tax will allow job creators to hire more workers and naturally grow our economy and and revenue.
Please join me and co-sponsoring this important piece of legislation.
Introduced as HB2002