PA-Gov Round-Up: Will the Real Taxman Please Stand Up?
This makes sense, though, as taxes are always among citizens’ primary concerns. They are how the state gets it revenue, the tax structure and rates say a lot about our priorities as a commonwealth and, perhaps most importantly, they give me an excuse to bring up one of my favorite songs.
This battle, like most campaign fights, took place over the airwaves and in press releases.
This all started when Democratic nominee Tom Wolf floated a proposal to raise the state’s income tax in an interview with the Associated Press. The idea would be that the levy would be changed from a flat tax system (where everyone is taxed at the same rate regardless of income) to a progressive tax system (where citizens pay more taxes the more money they make). For instance, Pennsylvania currently uses a flat tax while the federal government uses a progressive tax.
Wolf’s proposal called on higher taxes for wealthy Pennsylvanians, which would allow for a reduction in property taxes and more funding for schools. During this interview Wolf identified “households with taxable incomes of roughly $70,000 to $90,000” as part of the middle class he wanted to give a tax cut.
The Corbett campaign, however, sees this entire plan as a scheme to raise taxes on middle-class Pennsylvanians. In fact, they are even launching what they’re calling the “Millionaire Secretary Tom Wolf Hypocrisy Tour.”
“Secretary Tom Wolf is once again demonstrating that there should be lower taxes for him, and higher taxes for the rest of us,” stated Communications Director Chris Pack. “Before Secretary Tom Wolf was a candidate for governor and was just your run-of-the-mill business owner in the State of Delaware avoiding paying his fair share of Pennsylvania corporate taxes, he paid a drastically lower income tax rate than average Pennsylvania families. But as a candidate for Governor, he is now engaging in class warfare by suddenly calling for higher taxes on ‘people like me,’ which he defines as middle class families making more than $75,000. That is incredibly disingenuous and further demonstrates that Wolf is willing to say or do anything to get elected.”
The Corbett-Cawley team doubled down on this attack by launching a new TV ad as well. Their commercial not only hit Wolf on his tax plan but also went after him for paying a lower than normal tax rate and seeking to escape state taxes by moving his business in Delaware.
Unsurprisingly, the Wolf campaign did not agree with Governor Corbett’s interpretation.
They pointed out that the Wolf Organization doesn’t use the Delaware loophole and is headquartered and pays taxes in PA. The campaign also claimed that Wolf’s proposal would be the first PA income tax cut in 22 years.
Meanwhile, they released an ad of their own, which accused the Governor of raising taxes on the middle class. The spot cited the gas tax that was used to fund the transportation bill. Republicans have always insisted that the burden of that tax is being placed on oil companies and not drivers.
Finally, to the question on whether Wolf’s plan raises taxes on the middle class, the answer depends (as Obi Wan would say) on your point of view.
In his interview, Wolf indicated that $90,000 was what he considered to be the ceiling on a middle class income. According to the U.S. Census Bureau, the median household income in Pennsylvania in 2012 (the last year the statistic is available) was $51,904. Meanwhile, the statistics for national household income showed those making $89,999 would be roughly in the 73rd percentile of Americans. This means that about 27% of Americans make $90,000 or more in household income. If we use the $75,000 figure the Corbett campaign cites instead, that drops to about the 65th percentile.
Either way, I would prepare yourself to hear plenty more about taxes in the coming months.