Press Releases

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While the tax cuts proposed in the House of Representative plan may not be the largest in American history, they are very likely the ones most weighted to benefit the very richest Americans. The House plan will tilt the tax system to taxing wages far more and capital far less. At a time when there is no supply-side barrier to new business investment, there is no economic justification for this transformation in our tax system. This is a plan that is only justified by greed on the part of the richest Americans who have already received most of the benefits of economic growth in the last forty years, and on the part of members of the Republican Party who expect to be rewarded for acting on their behalf.

House Republican leaders highlight an increase in the maximum value of the federal Child Tax Credit (CTC) as their tax bill’s signature benefit for working families, but the provision completely excludes 315,000 children in Pennsylvania whose parents work in low-paying jobs, according to a new report from the Washington, DC-based Center on Budget and Policy Priorities. Another 409,000 Pennsylvania children in low-income working families would receive less than the full $600 increase in the credit that would be available to higher income families. 

Under the House plan the top 1% of households will receive 30% of all tax cuts in 2018, an average reduction of $46,000 on an average income of $1.8 million. By 2027, their share of the tax cut will grow to 44%, with an average reduction of $66,120 on an average income of $2.45 million.

The bottom 60% will receive only 15% of the total tax cut in 2018, an average reduction of $370 on an average income of $33,000. By 2027, their share of the tax cut will drop to 14%, with an average reduction of $290 on an average income of $47,000.

Marc Stier, Director of the Pennsylvania Budget and Policy Center, released the following statement on the recently-released U.S. House GOP tax bill.

The budget plan released today by a group of Republican House members fails in the most important task before our state today: to resolve the long-term structural imbalance between expenditures and revenues. Even if every fund transfer proposed by the Republican back-benchers today were Constitutional and legal, and even if they had no impact on the commitments made by the General Assembly to provide funding for public purposes, this one-time transfer will provide almost no recurring revenues to support the state’s on-going commitments. Even if this proposal made sense, it leave us facing a deep deficit next year — one that would grow deeper every subsequent year.

As work on the 2017-18 budget continues, a bipartisan group of state legislators have become more vocal in their support of a severance tax on natural gas drillers. In response, the Marcellus Shale Coalition is putting on the full-court press.

In its recent letter to Speaker Mike Turzai, the Marcellus Shale Coalition points, in paragraph three, to the effective tax rate (ETR) on production as a key indicator of whether Pennsylvania should enact a severance tax in addition to the per-well impact fee we already have.

As legislative leadership and Governor Wolf look to wrap up the revenue portion of the 2017-18 state budget, the remaining negotiations is at least focused on the right subject: finding adequate and sustainable long-term revenues. Unfortunately, rather than work for new recurring revenues, Republican Leadership continues on the irresponsible path it has taken for most of this decade.

The Manatt Health Group and the Robert Wood Johnson Foundation have released a new study of the impact of the Senate health care bill, the Better Care Reconciliation Act of 2017, on the states. Their estimates of the impact of the bill confirms our recent study showing that Pennsylvania will suffer devastating reductions in federal funding for Medicaid. It also offers some more fine-grained detail on the nature of these reductions.

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