Pennsylvania Among 'Terrible 10' Most Regressive Tax States

By Chris Lilienthal, Third and State

Working families in Pennsylvania pay a far higher share of their income in state and local taxes than the state’s wealthiest earners, according to a new study by the Institute on Taxation and Economic Policy (ITEP).

Pennsylvania’s tax system scored so poorly that it made the list of the “Terrible 10” most regressive tax states in the nation.

The Pennsylvania Budget and Policy Center (PBPC) co-released the report, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, with ITEP. PBPC Director Sharon Ward made the point in a press release that "No one would deliberately design a tax system where low-income working families pay the greatest share of their income in taxes, but that is exactly the type of upside-down tax system we have in Pennsylvania.”

Middle-income families in Pennsylvania pay more than double the share of their income in taxes than the very wealthiest Pennsylvanians, while low-income families pay nearly three times as much as top earners, the report found. Get more details on the report, including a Pennsylvania fact sheet, here.

PA State & Local Taxes: Shares of family income for non-elderly taxpayers

The report should bury once and for all the myth of the makers vs. the takers. Low-income families in Pennsylvania are paying much more of their income in state and local taxes than the top 1%.

February 4 Non-Partisan Training: HOW TO RUN FOR ELECTION BOARD IN 2013: HOW TO RUN FOR COMMITTEEPERSON IN 2014

Because the response to our workshop on January 14 exceeded our expectations, we are doing it again!

Making A Difference!
How You Can Strengthen Democracy in Philadelphia

Come to this non-partisan training; learn how you can win one of these positions. Help strengthen women’s voices in our political process and protect the right to vote!

HOW TO RUN FOR ELECTION BOARD IN 2013
HOW TO RUN FOR COMMITTEEPERSON IN 2014

When: Monday, February 4, 2013 from 5:30-7:30 pm
Where: Community College of Philadelphia
Winnet Student Life Building
Lecture Hall S2-3
17th Street b/w Spring Garden and Callowhill Streets
Philadelphia Pa 19130

Speaker:
Stephanie Singer, City Commissioner

Running for committeeperson is a very easy entry point into electoral politics. You don’t need to raise money; you just need the time and willingness to talk to your neighbors. Running for committeeperson is a way to learn grassroots organizing skills, gain leadership experience, and learn how the political system works.

Running for Election board is an opportunity to ensure that we have fair elections. The Voter ID law, which is slated to be implemented in 2013, has drawn attention to what has been a very low profile position—the Judge of Elections. In each division, the Judge of Elections resolves disputes and makes determinations about voter eligibility in areas where the law is ambiguous. With the enactment of the Voter ID law, the position of Judge of Elections has become much more important. The Majority and Minority inspectors also play an important role in ensuring fair, well-run elections.

Sponsored by the Philadelphia Chapter of the National Organization for Women and the Philadelphia Chapter of the Coalition of Labor Union Women, and West Philadelphia Coalition of Neighborhoods and Businesses.

The Reports of Unions' Death Are Greatly Exaggerated

By Stephen Herzenberg, Third and State

There's a good deal of crowing in conservative circles this week about the new 2012 numbers on union membership. Union membership nationally fell by about 400,000, to 14.4 million. Union membership in Pennsylvania declined 45,000, including 59,000 in the private sector.

Of course, for anyone who cares about, say, the American Dream, democracy, and rising living standards, the newest numbers are bad news. A simple chart put together by the Center for American Progress shows that unions are vital to the middle class. As unions have weakened, so has the share of income going to middle-income workers — and the gap between the 1% and the 99% has mushroomed.

Ask Allyson Schwartz to run for Governor

From Marc Stier at Large

Barack Obama is back in office and moving in a liberal direction. So now it’s time to think ahead about building progressive power. The most important thing we can do in Pennsylvania is to replace Tom Corbett as Governor. So it’s a little surprising to me is that, with all the talk about this candidate or that, the one Pennsylvania politician who is best placed to defeat Governor Corbett, Congresswoman Allyson Schwartz, is not being asked by everyone to run. The main reason, I suspect, is that most people who pay close attention to politics don’t think she will do so. And some folks, for the usual reasons, have trouble getting their head around the idea of a woman as Governor.

I have no inside knowledge about whether Congresswoman Schwartz is considering a race. But I strongly believe that she should run. After explaining why, I’ll come back to the issue of whether she will or not.

Mind the gap: Opting Out of Medicaid Expansion Leaves Low-income Families Behind

By Michael Wood, Third and State

Federal health care reform is moving forward thanks to the U.S. Supreme Court’s ruling last year — and it is a great deal for Pennsylvania. Unless the state decides to “opt out,” Medicaid coverage will be expanded to include many Pennsylvanians who are uninsured.

One group that will benefit immediately are parents with incomes up to 133% of the federal poverty level ($25,390 for a family of three). The benefits don’t end there: others who don’t receive health coverage through their work will be able to buy insurance on a competitive health marketplace or exchange — making coverage more affordable.

However, if Governor Corbett prevents the Medicaid expansion, it will create a coverage gap for families between 46% and 100% of poverty, as the chart below shows (click on it for a larger view).

Those families between 46% and 100% of poverty earn too much to qualify for Medicaid (for a family of three, this means earning over $8,781 but less than the federal poverty line of $19,090). These families won’t receive Medicaid coverage, and they won’t receive subsidies to buy health coverage.

We all benefit when more people have health coverage. Let’s make the right decision in Pennsylvania and expand Medicaid coverage.

PA Revenue Strong Midway Through Year; Tax Cut Could Have Big Impact

By Michael Wood, Third and State

With a strong December showing, the commonwealth now has a General Fund revenue surplus of $171 million (1.4% above estimate) for the first half of the 2012-13 fiscal year, double the Corbett administration’s revised estimate for the entire fiscal year. The strong December collections exceeded estimate by $112 million (or 4.8%).

The increased revenue is a good sign of a modestly recovering national economy and a brightening of the state’s fiscal picture going into the 2013-14 budget season. This is a nice change from previous years when midyear shortfalls triggered cuts to state services.

In December, personal income, corporate, and realty transfer taxes exceeded revenue targets by 10.1%, with sales, inheritance and other taxes (on cigarettes, alcohol, and table games) falling short of expectations by 2.8%.  

A similar picture exists over the first half of 2012-13 — corporate, personal income and realty transfer tax collections are a combined 5% higher than expected, while sales, inheritance, and other taxes have fallen 2.4% short of budget estimates.

One area of concern is that sales tax collections (the state’s second largest tax source) are $125 million, or 2.7%, lower than projected. It is not clear the reason for this as vehicle sales and consumer spending have been increasing. Perhaps the new tax collections from some online retailers may not be as large as anticipated.

Compared to last year, collections are $583 million, or 5%, higher, with corporate ($254 million) and personal income tax ($186 million) collections making up most of the increase in 2012-13.

What to Make of the Fiscal Cliff Deal?

By Sharon Ward, Third and State

Tell us what you think about the Fiscal Cliff deal. Take our two-question survey.

The agreement reached by President Obama and Congress on January 1 was both historic and disappointing — and it leaves much unsettled. The urgency of the Fiscal Cliff has dissipated, but significant threats remain to federal funding for state and local services as well as refundable tax credits for low-income working families, Medicaid, Medicare and Social Security.

There is much to dislike in this agreement. It makes permanent most of the Bush era tax cuts, ensuring that income from dividends and capital gains will be taxed at a lower rate than income from work. It makes permanent the estate tax but locks in a tax rate that creates a huge windfall for the top 0.3% of households. Sequestration cuts — the automatic spending cuts that members of both parties hated and the President said would not occur — have been postponed for two months, with three-quarters of FFY 2013 cuts ($85.6 billion) and $109 billion in annual cuts after that still in law through 2022. The President’s line in the sand on raising tax rates for the top 2% of earners got pushed way back, with top rates kicking in at $400,000 for an individual and $450,000 for a couple. A low-wage earner might need 20 years to make that much.

Few in PA Would Be Affected by Ending High-income Tax Cuts

By Sharon Ward, Third and State

The Pennsylvania Budget and Policy Center is out today with a new analysis finding that President Obama’s plan to end federal tax cuts for high-income earners would have very little impact on taxpayers in most Pennsylvania counties.

In over half of the state's 67 counties, fewer than 1 in 100 residents (that's 1%) would pay the higher marginal tax rate on income above $200,000 for individuals and $250,000 for married couples.

In most counties, only a small number of individuals are affected. In 24 counties, fewer than 200 high-income earners would pay the higher rate. Almost two-thirds of the top earners who would be impacted reside in just six Pennsylvania counties.

Map 1. Percentage of Taxpayers in Each PA County with Incomes Over $250,000

Map 2. Number of Taxpayers in Each PA County with Incomes Over $250,000

Under President Obama’s plan, families earning over $250,000 would keep other tax breaks on the first $250,000 of income, including a lower bottom tax rate and preferential tax rates on capital gains and dividends — a savings of $12,112 per taxpayer. The top tax rates would be restored to those in effect in the 1990s when the nation added 23 million jobs.

CITY COUNCILS CALL ON PRESIDENT AND CONGRESS TO AVOID CUTTING SERVICES

As the federal government faces major decisions regarding our nation’s budget and fiscal policies, cities around the country are passing resolutions calling on the President and Congress to prioritize the revitalization of the economy, the creation of millions of new jobs, and a return to broadly-shared prosperity.

Led by members of Local Progress, the new national municipal policy network, over the past two weeks the cities of Baltimore, Cambridge, Chicago, Hallandale Beach, Philadelphia, New York, Seattle, and Yonkers have signaled their official support for a solution that avoids cuts to vital services for the most disadvantaged members of society or to Social Security, Medicare, or Medicaid benefits and that raises crucial revenue from the wealthiest two percent of Americans.

“Unwise cuts to federal spending inevitably shift costs onto states and municipalities, which, unlike the federal government, cannot cope with them through deficit spending,” said Joe Moore, a Chicago City Council Alderman. “Cuts to funding for housing, community development, public health, and public safety will deprive millions of poor Americans of basic necessities like food, medicine, and a home in a safe community.” The resolution introduced by Moore was supported by all 50 Aldermen.

“The American economy continues its slow and inadequate recovery from the Great Recession; twenty million people want to work full time but cannot; and a weak economy undermines the nation’s social fabric and deprives future generations of the opportunity to live rich and fulfilling lives,” said Chuck Lesnick, the Yonkers City Council President. “We need growth, not austerity.”

First Step to Avoid the Fiscal Cliff: Close Offshore Tax Loopholes

For Immediate Release:

Thursday, December 6 2012

Contact:

Angela Lee, PennPIRG Program Associate

215-735-9760; alee@pennpirg.org

First Step to Avoid the Fiscal Cliff: Close Offshore Tax Loopholes
Offshore Tax Dodging Costs U.S. $150 Billion Annually; Groups Illustrate Impact with 16 Dramatic Ways Lost Revenue Could Be Used

PHILADELPHIA, December 6th – With Congress scrambling to agree on ways to reduce the deficit, PennPIRG joined with small business owners and student groups today to point out a clear first step to avoid the “fiscal cliff”: closing offshore tax loopholes. Many of America’s largest corporations and wealthiest individuals use accounting gimmicks to shift profits made in America to offshore tax havens, where they pay little to no taxes. This tax avoidance costs the federal government $150 billion in tax revenue each year. PennPIRG released new data illustrating the size of this loss with 16 dramatic ways $150 billion could be spent.

“When corporations skip out on their taxes, the rest of us are left to pick up their tab,” said Angela Lee, state advocate for PennPIRG. “Right now, this kind of tax dodging is perfectly legal, but it’s not fair and it’s time to put an end to it.”

The new "philanthropy": Private money shaping public policy in Philadelphia's education reform

Jeremy Nowak is out as president of the William Penn Foundation. In light of his abrupt departure, deeper questions emerge about the role the foundation played under his tenure.

For months, Parents United for Public Education has raised questions about the Foundation’s role in funding and directing the work of the Boston Consulting Group (BCG). Two weeks ago we sent a letter to the William Penn Foundation and Boston Consulting Group asking them to respond to a legal analysis we commissioned from our lawyers at the Public Interest Law Center of Philadelphia, which argued that the Foundation’s unusual arrangement with the Boston Consulting Group may constitute lobbying.

In February the Boston Consulting Group, a multinational corporation with an educational strategies division, arrived with the stated purpose of creating a District blueprint and a five year financial plan. Instead they parachuted into Philadelphia with a polarizing agenda that called for mass charter expansion, closing dozens of schools, and forcing schools into education management networks.

While many know the plan was paid for by the William Penn Foundation, most people may not realize the significance of WPF contracting directly with BCG without the District being a party to the contract. William Penn Foundation solicited donors specifically for the BCG contract and then oversaw a fund at a separate agency that disbursed donations exclusively to BCG. This structure allowed the identities of many of those who paid for BCG’s work to remain secret, along with any economic interests they may have had in the policies and decisions being advanced. For example, among the donors are a prominent real estate developer and individuals and groups with direct interests and ties to religious and charter organizations. The Foundation funded a separate communications strategy for the District without the public ever knowing what public communications came from William Penn and what came from the District.

Perhaps most significantly, BCG’s contracts with WPF explicitly stipulated that BCG’s work would promote charter expansion, management networks, identify 60 top candidates for school closure and impact labor negotiations. Specific mention was made in their contract about influencing the SRC before an important May vote. Not surprisingly, the report BCG delivered to the School District was nearly identical to the contract agreement BCG had with the Foundation and, by extension, the donors who funded the work.

As a third party entity, BCG had unprecedented access to District data and financial information all made unavailable to the public. They had unprecedented access to high-level decisionmakers and private forums to push their plans. While the rest of the public had to settle for limited information and public processes, BCG circumvented a public process with its unique status as a philanthropic consultant.

From our viewpoint as parents, this is not education expertise at play. After all, BCG avoided almost any public contact or dialogue. It was not acting as a philanthropic entity – not when private dollars and private interests promoted a singular and narrow agenda and enabled BCG to forego public processes in favor of private audience.

It was for this reason that Parents United for Public Education requested a legal opinion from the Public Interest Law Center of Philadelphia about whether the Foundation was engaged in lobbying and had violated city lobbying laws by failing to register as lobbyists and disclose its donors and activities. PILCOP concluded that the third party contracting and the clear intent to impact policy and high level decisionmakers all constituted lobbying. Our letter to the Foundation two weeks ago detailed these concerns, included PILCOP’s legal analysis and requested a response in two weeks time.

On a national level, a number of public education observers and public interest advocates have raised serious concerns about the role of “philanthropic” investments into education reform. From the Broad Foundation to the Waltons and Gates Foundations – what we’re seeing across the country is an unprecedented level of private money shaping public policy under the guise of philanthropy. Too often that agenda has centered around a radical dismantling of public education, increased privatization, and disruptive reform that has sent many districts spiraling into chaos and sustained turmoil.

We have no idea whether our complaint about lobbying had any influence on Mr. Nowak’s departure. Whether or not it did, foundations and “reformers” everywhere need to sit up and look critically at practices that risk substituting private agendas for true public purpose.

11-22-12

Five years ago, Thanksgiving, I wrote this. I knew I had found something good (though I didn't yet know that included someone who would love me, justice, and Philadelphia sports teams with more or less equal burning intensity).

This fall Dan and I got married. And this morning we were up in Bucks County, seeing the movie 'Lincoln' with my parents. To count just some blessings:

Getting to see that movie with my dad, who now lives at home despite sudden severe disability, thanks only to our still-present social safety net that gives him the choice to live in his own home with my mom instead of being trapped in a nursing home.

The fact that in this election enough Americans used their votes to make clear they want a country that sees us all having a stake in each other.

That there are advocates who fight for a fair shot for all who are treated as expendable: those working to restore lifeline state 'general assistance' benefits after they were torn away earlier this year through cowardly political maneuvering, as today's important piece sharply reminded us; those who are trying to cut through the many financial and political agendas in order to actually focus on what makes schools work for their students; and, always, those who daily devote themselves to people suffering addiction and trauma, giving a small or large beacon of kindness and understanding to people in the darkest places.

Thank you. These are "the ripples of hope" that travel out through the world, to quote Bobby Kennedy via that video where our president cried while saying thank you to the people who worked to elect him in hopes of moving us towards a more just world.

There's no Fiscal Cliff; It's An Income Cliff

While the national focus is on a make-believe deficit “crisis”, Philadelphia is facing an all too real income crisis. Too many families, including many with at least one full time worker, simply can’t meet their basic needs.

Of course our entire State includes huge numbers of struggling families, 840,000 families to be exact, including 2.3 million individuals, according to a recent study by Pathways PA. But Philly is tops in “income inadequacy” with 42% of our entire population not able to meet basic needs such as housing, child care, food, health care and taxes. Yes, the poor and the marginally poor do pay taxes.

During the Presidential campaign, the problems of these folks, and the cities like Philadelphia that are home to so many of them, fell off the cliff. Instead another cliff engendered all the conversation, and continues to, the so-called “fiscal cliff.”

The fiscal cliff is what we’re all supposed to fall off of if Congress doesn’t act on tax and budget policies by midnight on December 31. At that point all the Bush tax cuts will expire and massive budget cuts will take place. All of this because both parties have been laser-focused for two years on the need to cut deficits, and to that end have created their very own emergency to force themselves to act.

But as Paul Krugman repeatedly points out, there is no deficit crisis. We need no spending cuts (except in the bloated Defense Department budget.) We are told that deficits are threatening to create uncontrollable inflation and sky high interest rates. But the reality is that as deficits have grown, interest rates and inflation have fallen. The only real deficit is the income deficit.

Will Pennsylvania Take Full Advantage of Health Reform?

By Chris Lilienthal, Third and State

With the election decided, it is now clear that the Affordable Care Act is here to stay. That’s great news for Pennsylvanians, some of whom have already begun to benefit from the health reform law, and many others who will see more gains as major provisions take effect in 2014.

As Judy Solomon writes at the Off the Charts Blog, a key provision of the law will allow states to expand Medicaid to cover low-income adults earning up to 133% of the poverty line, with the federal government covering most of the costs:

The question now is whether some states will squander this opportunity to cover millions of uninsured Americans.

Coverage for more than 11 million poor, uninsured adults is at risk if states don’t expand Medicaid, according to the Urban Institute.

Status of Health Reform Medicaid Expansion

As you can see in the chart above, Pennsylvania is among the states that have not made a clear decision on the Medicaid expansion. 

Pennsylvania Tax Giveaways and an Island in the Sun

By Jamar Thrasher, Third and State

A few weeks ago, the Pennsylvania General Assembly fast-tracked a bill in the waning days of the legislative session to allow certain private companies to keep most of the state income taxes of new employees. News reports to follow indicated the new tax giveaway was designed to lure California-based software firm Oracle to State College.

Well, it turns out the CEO of Oracle, which will benefit from the largess of Pennsylvania taxpayers, recently bought his very own Hawaiian island, as CNN reported back in June.

Oracle CEO Larry Ellison, the third richest man in the U.S., purchased about 98% of Lana'i, the sixth largest of the Hawaiian islands. Forbes reported that the deal was rumored to be worth $500 million.

As CNN tells us:

The island includes two luxury resorts, two golf courses, two club houses and 88,000 acres of land, according to a document filed with the Public Utilities Commission.

Which bring us back to Pennsylvania, where Governor Corbett recently signed House Bill 2626, allowing qualifying companies that create at least 250 new jobs within five years to pocket 95% of the personal income taxes paid by the new employees. 

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