Wednesday, June 17, 2009

Fight brewing over .5% PIT Increase Proposal

Reaction to Pennsylvania Governor Ed Rendell’s call for an income tax hike is falling along strict party lines. Rendell says increasing Pennsylvania’s personal income tax by a half-percentage point is the best way to bridge a $3.2 billion budget gap. Republican lawmakers disagree. House Minority Leader Sam Smith says raising tax rates would have a significant impact on Pennsylvania families. “To the people that are living on a household income of 40, 50 thousand dollars a year, that’s the difference between them being able to go on a family vacation, or keep their kids in Little League, or their pool membership, or whatever. Those are important things to average families.” Rendell wants to increase the rate to 3.57 percent, which amounts to an extra 250 dollars a year, or five dollars a week, for a person making 50-thousand dollars. Republicans are quick to point out that the additional .5% is a 16% increase of the existing earned income tax. The Governor insists the increase would only last for three years, but Smith and other Republicans say any tax hike would quickly become permanent. Smith says, “The nature of government is to spend what’s there, and once it’s being spent it’s hard to cut back. That is the unique characteristic of this budget debate. If you’ve ever going to get spending under control, this is the type of year that you need to move in that direction.” House Democratic leaders say they’re supporting the effort. House Appropriations Chair Dwight Evans, a Philadelphia Democrat, says, “I think that the gap is of such a nature that he had to do it. It’s a temporary tax, first, to protect our education, to protect investments in after school programs, arts, things of that nature. I think he had to do it. He had no choice.”

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