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10/23/2020 07:25 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20190&cosponId=26895
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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: December 7, 2018 01:44 PM
From: Senator Art Haywood and Sen. Vincent J. Hughes
To: All Senate members
Subject: Fair Share Tax
 
In the near future, we will reintroduce SB 555 of the 2017-18 session for a Fair Share Tax Plan that cuts taxes for most Pennsylvanians while simultaneously increasing total revenues by $2 billion.

The Institute for Taxation and Economic Policy lists Pennsylvania among the “Terrible 10” states for unfair and regressive taxation that punishes low and moderate income residents in our state nation. At the same time, corporate taxes have been cut by $2.6 billion since 2010, our state's infrastructure is failing, our college students have the 3rd highest level of student debt and too many of our cities and towns are blighted and jobless.

It’s clearly time for a bold, responsible and creative solution. The Fair Share Tax Plan will cut Personal Income Tax (PIT) on a person’s active income from wages and interest to 2.8%. In addition, it will impose a tax rate of 6.5% on passive income from net profits, dividends, net gains derived from rents, royalties, patents and copyrights, gambling and lottery winnings and net gains derived through estates and trust. The Pennsylvania Budget and Policy Center calculates that this legislation would add up to $2 billion in new revenues for the Commonwealth annually and cut $574 million in taxes for everyday people.

Even with the Fair Share Tax, the effective tax rate for the top 1% would be 3.6%, still lower than any neighboring state. While the top 15% bear a higher burden than most Pennsylvanians, most urban, suburban and rural taxpayers we serve would receive a tax cut. Once the Fair Share Tax is explained to Pennsylvanians, 58% support it. The attached chart shows how many of your constituents in your legislative district would see their taxes cut or unchanged under the Fair Share Tax Plan.

This legislation complies with the Pennsylvania Constitution’s Uniformity Clause because it still imposes the same flat tax rate within each of the eight existing classes of personal income (listed above). The Pennsylvania Supreme Court decided that the Uniformity Clause requires all taxes to be uniform “upon the same class of subjects” so long as a reasonable, non-arbitrary distinction exists relative to the classification in Aldine Apartments, Inc. v. Commonwealth, 493 Pa 480, 487 (1981).

Please join us in sponsoring this legislation.

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Introduced as SB758