State Budget and Taxes

Why Pennsylvania Should Close Tax Loopholes

On Tax Day, I wanted to share my recent op-ed for PennLive.com on Governor Corbett's tax cut plan and the need for real tax reform in Pennsylvania.

On Tax Day, Understanding Where Our Tax Dollars Go

With the deadline upon us for filing state and federal tax returns, the Pennsylvania Budget and Policy Center has put together a resource web page to help you understand what your tax dollars support. We also highlight reports and educational materials on closing tax loopholes and improving overall tax fairness.

As the chart to the right shows, most of the federal budget supports defense, Social Security and major health programs. As federal policymakers and citizens weigh key decisions about revenues and expenditures, it is instructive to examine what the federal government does with the money it collects. The chart is from the Center on Budget and Policy Priorities.

Public investments by the Commonwealth of Pennsylvania educate our children, keep our communities safe, move people to work over roads and transit systems, and care for seniors, children and people with disabilities. More than 80 cents of every state General Fund dollar is spent on education, health and human services, or public safety. See the graphic below detailing General Fund spending in 2012-13.

Third and State This Week: Expanding Health Care Brings Jobs, Governor's Flawed Tax Plan & Tax Credits that Work

The week at Third and State, we blogged about a study showing the economic benefits of expanding Medicaid health coverage in Pennsylvania, the Governor's costly corporate tax cut plan, and two federal tax credits that work for Pennsylvania families.

IN CASE YOU MISSED IT:

  • On state taxes, Sharon Ward blogged that Governor Corbett's plan to cut the state's corporate net income tax over 10 years, at a cost of more than $800 million when fully phased in, would come at a time when the commonwealth is having difficulty meeting its current obligations.
  • On health care, Chris Lilienthal blogged about a recent study commissioned by the Hospital and HealthSystem Association of Pennsylvania finding that the federal opportunity to expand Medicaid health coverage will inject at least $3.2 billion annually into the state’s economy and support 35,000 to 39,000 jobs over the next seven years.
  • On poverty, Chris Lilienthal shared an infographic showing how critical the Earned Income Tax Credit and Child Tax Credit are to working families in Pennsylvania.
IN OTHER NEWS:
  • As Tax Day approaches, the Pennsylvania Budget and Policy Center (PBPC) has posted infographics and resources on its web site to help you understand what your tax dollars support and how we can improve overall tax fairness.
  • PBPC Director Sharon Ward published an op-ed on PennLive.com on the need for true state tax reform that closes loopholes and improves accountability, rather than another round of corporate tax cuts.
  • PBPC hosted a webinar debunking tax and budget myths promoted by the American Legislative Exchange Council (ALEC).
ADDITIONAL RESOURCES:
  • Learn more about public pension reform in Pennsylvania at the Keystone Research Center's Pensions Issue Page.
  • Learn more about the federal opportunity to expand health coverage in Pennsylvania at PBPC's Medicaid Expansion Resource Page.
  • Learn more about education in Pennsylvania at PBPC's Education Facts Page with data on student enrollment, education funding, and school poverty.

Governor's Corporate Tax Cut Plan Will Cost $800 Million

I am testifying before the Pennsylvania House Finance Committee today on Governor Tom Corbett's plan to cut the state's corporate net income tax rate by 30% over a decade. This tax cut, along with a number of other tax policy changes, will cost the commonwealth — conservatively — more than $800 million annually when fully phased in.

Webinar Debunks Myths Promoted by ALEC

PA Policy Perspectives: A Webinar SeriesThe American Legislative Exchange Council, or ALEC, may have recently abandoned its advocacy of controversial Voter ID and Stand Your Ground laws in the face of public scrutiny — but it hasn’t stopped pushing for fiscal policies that benefit corporations and the wealthy at the expense of the rest of us.

Expansion of Health Care Will Boost PA Economy, Hospital Study Finds

Acting on the federal opportunity to expand Medicaid health coverage will give Pennsylvania’s economy a real shot in the arm. As a new study from the Hospital and HealthSystem Association of Pennsylvania shows, it will inject at least $3.2 billion annually into the state’s economy and support 35,000 to 39,000 jobs over the next seven years.

Third and State Recap: Disappointing Job Growth, Ryan Budget's Impact on PA, Revenue Update, Frack Attack & More

After taking a break last week, Third and State is back with a blog recap for the past two weeks. We blogged about the latest U.S. jobs report and Pennsylvania revenue update, the billions Pennsylvania could lose under Congressman Paul Ryan's budget, Ed Rendell making the case for gas drilling in New York, how "Tax Freedom Day" overstates the taxes most Americans pay, and much more.

IN CASE YOU MISSED IT:

  • On jobs and the economy, Mark Price wrote that U.S. job growth continued to disappoint in March.
  • On federal tax and budget issues, Sharon Ward blogged about how Paul Ryan's budget cuts critical federal funding for Pennsylvania's schools, health care, clean water, law enforcement, and other key services, while providing big new tax cuts to corporations and the wealthiest individuals. We also wrote about tax credits for working families that are in jeopardy in federal deficit reduction talks. Finally, Chris Lilienthal blogged that the Tax Foundation's "Tax Freedom Day" presents a misleading picture of the taxes that most Americans pay.
  • On the Marcellus Shale, Sharon Ward blogged about how former Governor Ed Rendell got into some hot water last week with an op-ed in the New York Daily News touting the economic benefits of hydrofracking. Mark Price shared new data on natural gas-related employment in Pennsylvania.
  • On state budget and taxes, Michael Wood wrote that state revenue collections fell short of projections in four of the last five months, which could put 2013-14 spending in jeopardy.
  • On health care, Sharon Ward shared a recent op-ed she wrote explaining why Pennsylvania should take a federal opportunity to expand health coverage under the Affordable Care Act. Chris Lilienthal explained how you can let your lawmakers know that expanding health coverage is the right choice for Pennsylvania.
  • On education, Jamar Thrasher blogged about a recent report finding that the nation's poor students are not attending the nation's top colleges and universities.

IN OTHER NEWS:

  • The Pennsylvania Budget and Policy Center (PBPC) is launching a new policy webinar series next week, starting with one Tuesday that will debunk the tax and budget myths promoted by the American Legislative Exchange Council, or ALEC.
  • Read PBPC's full analysis of Pennsylvania's March revenue report.
  • Learn more about the threat facing federal tax credits for working families — including the Earned Income Tax Credit and Child Tax Credit.
  • Learn more about public pension reform in Pennsylvania at the Keystone Research Center's Pensions Issue Page.
  • Learn more about the federal opportunity to expand health coverage in Pennsylvania at PBPC's Medicaid Expansion Resource Page.
  • Learn more about education in Pennsylvania at PBPC's Education Facts Page with data on student enrollment, education funding, and school poverty.

Another Revenue Shortfall in March Could Put 2013-14 Spending in Jeopardy

Pennsylvania tax collections in March fell short of estimate by nearly $100 million (or 2.3%) — in what is typically the commonwealth’s biggest month for tax collections. The total shortfall, after accounting for non-tax revenue, was $69 million, or 1.6% below monthly revenue targets.

Pennsylvania still has a revenue surplus for the fiscal year, but it has shrunk from a high of $171 million in December to $36 million in March. I have a more detailed analysis, including all the numbers, at the Pennsylvania Budget and Policy Center's web site. Below are the highlights.

‘Tax Freedom Day’ Overstates Taxes Most Americans Pay

Tax Foundation's Average Far More Than What Most Americans Pay in Federal TaxesThe Tax Foundation released its annual “Tax Freedom Day” report today that once again presents a misleading picture of the taxes that most Americans pay. It takes a one-size-fits-all approach to taxpayers — one that fits Bill Gates and Warren Buffett a lot better than it fits most Americans. The result is an “average” tax rate that is likely higher than the tax rates paid by eight out of every 10 U.S. households.

The Tax Foundation’s calculation also relies on estimates that often change once the actual numbers come in because it is based on anticipated tax revenue from thousands of states and municipalities. These have proven to be hard to predict, particularly in tough economic times, making the estimated data unreliable. 

Pennsylvania Could Lose Billions Under Ryan Budget

Federal Medicaid and CHIP Funding Cut by 31% Under Ryan Block Grant in 2023Federal deficit reduction should not fall squarely on the backs of low-income and middle-class families. Yet that is exactly what happens in the budget plan approved last week by the U.S. House of Representatives.

That plan, authored by House Budget Committee Chairman Paul Ryan, cuts critical federal funding for Pennsylvania's schools, health care, clean water, law enforcement, and other key services, while providing big new tax cuts to corporations and the wealthiest individuals.

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