Pennsylvania state Rep. Jason Ortitay (R-South Fayette) introduced a bill to reduce the state’s personal income tax by 0.25 percentage points, from 3.07 percent to 2.82 percent.
House Bill 2002 (H.B. 2002) was referred to the state House of Representatives’ Finance Committee in January, where it awaits consideration.
Concerned About Out-Migration
Ortitay says people are leaving the state because of the high cost of government.
“The younger generation is leaving,” Ortitay said. “They come here, get a great education, and then they leave. From the sales tax, the personal income tax, the local municipality tax, occupational privilege taxes, and all the other fees that go along with it, it is like death by a thousand cuts here in Pennsylvania when you look at our overall tax burden.”
Ortitay says he’s concerned about how the state’s tax structure disadvantages future generations.
“Our tax burden, as a state, is actually pretty high, compared to the rest of the country,” Ortitay said. “Meanwhile, our personal income tax is 3.07 percent right now. It is one of the lowest in the country, but I think if we want to encourage working people to stay here, we need to make sure that their actual income-producing jobs are still here, and that they can use that extra discretionary money to make other purchases in their life. Right now, it is hard for someone getting out of college.”
Cites Job-Creation Effects
Bob Dick, a senior policy analyst at the Commonwealth Foundation, says H.B. 2002 would promote economic growth and new private-sector jobs.
“Pennsylvania has the fifteenth-highest state and local tax burden in the country,” Dick said. “Rep. Ortitay’s proposal would provide much-needed relief to millions of Pennsylvanians and hundreds and thousands of small-business owners who labor under one of the highest tax burdens in the country.
“There are hundreds and thousands of small-business owners that pay the personal income tax,” Dick said. “The proposed tax relief would provide an infusion of capital into these businesses, which they can then use to hire more workers, pay their employees more, or provide more benefits. Ultimately, it gives them a little bit more flexibility to manage their businesses, which will be good for the people currently searching for a job.”
Filling Pennsylvanians’ Pockets
Dick says the bill would enable Pennsylvanians to keep more of their hard-earned money.
“Under the representative’s proposal, more money will stay in the pockets of working people who actually earn it,” Dick said. “This means more money in the private sector that could potentially be used to create new businesses.”