‘Fair share’ plan whistles past the graveyard

‘Fair share’ plan whistles past the graveyard

As the Pennsylvania Capital-Star reports it:

“A quintet of Democratic lawmakers, hailing from Philadelphia, Allegheny and Lehigh counties, are floating a proposal that they say will level the playing field for Pennsylvanians who might still be stinging from paying their state income taxes a couple of weeks ago.”

Their so-called “fair share” plan “would tweak the state’s flat-rate, 3.07 percent income tax to make it less punitive for lower-income Pennsylvanians,” the news outlet says.

“People in our state work hard and deserve not to pay taxes that are unfairly high,” the sponsors say. “For too long, the very richest Pennsylvanians have gotten away with not paying their fair share, because of our upside-down tax structure in Pennsylvania.”

But Jake Haulk, president-emeritus of the Allegheny Institute for Public Policy, cuts through the boilerplate “progressive” misrepresentation to call the plan what it is:

“Typical leftist drivel.”

The sponsoring legislators, relying on “research” from the liberal Pennsylvania Budget & Policy Center, say “20 percent of the state’s families with the lowest incomes pay roughly 14 percent of their income on state and local taxes, while those in the top 1 percent only pay 6 percent toward those levies,” the Cap-Star reports.

“It’s the height of absurdity that the bottom 60 percent of income earners are, on average, paying nearly double the tax rate of what the richest Pennsylvanians pay,” one sponsor is quoted in a joint statement.

Talk about intellectual dishonesty.

“Which group pays the lion’s share of property taxes and federal and state income taxes?” Haulk asks. “Who funds the schools in poor districts and for the benefit of poor children? And so on and so forth.

“In short, what is the value of the net of benefits received over taxes for programs paid for with state revenues?  Heavily subsidized bus service ring a bell?

“Does the lowest income group’s income include income from welfare, unemployment benefits or other assistance?

“If these leftists are so concerned about fairness why not cut sales and use taxes, which are regressive?” asks the Ph.D. economist.

The Cap-Star says the “fair share” proposal would consider three options:

  • “Option One would raise $2.6 billion in new tax revenue. Under this plan, the personal income tax on wages and interest would decrease from 3.07 percent to 2.8 percent, and 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.
  • “Option Two would raise $6.22 billion annually by decreasing the income tax on wages and interest to 1.9 percent and increasing the tax on passive income to 12 percent.
  • “Option Three is a middle-ground between the first two options, decreasing the income tax on wages and interest to 2.35 percent and increasing the tax on passive income to 9.25 percent.”

The sponsors say their plan “creates a tax system that works for working people: one based in fairness and equality. It’s time to make Pennsylvania work for everyone, and having a fair tax system is an important start.”

Apparently, those who would be saddled with even more and higher taxes aren’t “working people,” right?

And what brainiac thinks penalizing investment income is a good thing?

It’s a tax grab, pure and simple.

Haulk says it’s the “fair share” proposals that are patently absurd.

“Maybe these folks who are concerned about inequities should look at passing legislation requiring updating assessments regularly,” noting the inherent inequities in the unconstitutional methodology now used to calculate property taxes.

“For poorer neighborhoods, where there is little sales turnover of properties, assessments are likely to be much higher relative to home property values than in well-off districts with rising house prices.”

Haulk says what’s really needed are economic policies that promote growth in higher paying jobs and lower tax rates, programs to improve educational outcomes in outrageously expensive public schools and efforts to reduce criminal behavior and homelessness in the state.

“Right-to-work legislation would be great, too, along with reducing the power of unionized transit workers, teachers and other government workers” that keep taxpayer costs artificially high and affect the poor the greatest, Haulk adds.

“In general, leftists should look at faster growing states and learn about what works economically,” the think tank scholar says. “Sadly, none of this even registers on their radar and they would ignore it if it did.”

Consider it the latest pathetic example of “progressives” whistling past the graveyard of reality as, Haulk notes, “they seek to bolster their statist bona fides.”

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).