Pennsylvania Income Tax Hike “Off the Table”

August 4, 2009

The push by Pennsylvania Gov. Ed Rendell (D) to raise his state’s flat income tax from 3.07% to 3.57% appears to have ended, according to the Pittsburgh Post-Gazette:

The group of 20 or so conservative Democrats, called the Blue Dogs, “wanted us to take the PIT [personal income tax] increase off the table,” said House Speaker Keith McCall, D-Carbon. “We have taken it off the table.”

Pennsylvania’s income tax isn’t too bad right now, which is pretty good because it’s business taxes and property taxes are awful. It’d be a shame if they got rid of the one bright spot about their tax system.

Of the 46 states that started their fiscal year on July 1, only Arizona and Pennsylvania have yet to adopt a budget. Senate Republicans have pushed for a $27.1 billion budget, compared to the $28.2 billion sought by Governor Rendell. Rendell has threatened to veto a budget if it cuts too much.

Other tax increases may be on the table:

With the income tax increase dead, House leaders said remaining options include: postponing the planned phase-out of a tax on businesses’ assets; eliminating some existing exemptions to the state sales tax (but not on food and clothing); increasing cigarette taxes and enacting new taxes on cigars and smokeless tobacco; enacting a new tax on natural gas; or legalizing table games in casinos and/or video poker in bars and taverns.

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