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03/28/2024 03:47 PM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20210&cosponId=36855
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House of Representatives
Session of 2021 - 2022 Regular Session

MEMORANDUM

Posted: February 11, 2022 02:02 PM
From: Representative Christopher M. Rabb and Rep. Elizabeth Fiedler, Rep. Sara Innamorato, Rep. Rick Krajewski, Rep. Summer Lee
To: All House members
Subject: Establishing the Fair Share Tax Plan
 
Redraft of House Bill 1738 (Fair Share Tax Plan)
 
Pennsylvania’s tax system continues to place a greater burden on our most financially vulnerable citizens. The Institute on Taxation and Economic Policy found that the poorest fifth of non-elderly Pennsylvanians pay roughly 14 percent of their income on state and local taxes, and middle-income residents pay nearly 11 percent, while the state’s wealthiest pay only 6 percent. 
 
Pennsylvania’s households who already struggle financially are also expected to pay nearly triple the tax burden than those who make more than $592,000 a year! It is time we made crucial changes to rectify Pennsylvania’s longstanding regressive income tax. 
 
This legislation would raise $2.8 billion in new tax revenue in two ways. First, the personal income tax on wages and interest would decrease from 3.07 percent to 2.8 percent. Second, the income tax would increase to 6.5 percent on passive income from things like net profits, dividends, net gains derived from rents, royalties, patents and copyrights, gambling and lottery winnings and net gains derived through estates and trust. 
 
This solution will both reduce the overall budget deficit as well as provide more relief for the majority of Pennsylvanians. As a result, 85 percent of Pennsylvanians would see either a decrease or no change in their taxes.
 
Please support this important legislation to create a more equitable income tax payment system in and for our commonwealth.