HARRISBURG, Pa. (KDKA) -- A budget research group that bills itself as non-partisan has endorsed Governor Tom Wolf's $38 billion budget plan.
Wolf is calling for a hike in the income tax but says most Pennsylvanians would pay fewer taxes. Gov. Wolf wants to increase the personal income tax rate from 3.07 percent to 4.09 percent.
The Pennsylvania Budget and Policy Center endorses the plan because they say it eliminates a huge tax inequality between low-wage earners and the wealthy. The center says low-wage earners in the state are getting unfair treatment when it comes to paying state and local taxes.
The center concludes Pennsylvanians making $23,000 or less pay 13 percent of their income to state and local taxes. The center says people who make $1.5 million, the top one percent of earners in the state, pay just 6 percent of their income in state and local taxes.
"We think we should have a progressive tax, people with more income should pay a higher share of the state and local taxes," said Marc Steir of the Pennsylvania Budget and Policy Center. "No one from any philosophical perspectives defends what we have in Pennsylvania."
Under Gov. Wolf's tax proposal, a family of four with a $50,000 income would pay no state taxes. Those making $1.5 million a year or more would get a tax hike of about $18,000 per year.
Steir says it's not just a question of fairness. He says the current tax structure does not work.
"The state simply cannot raise sufficient funds if it is going to tax the top one percent and next five percent and the 15 percent after that at lower tax rates than it taxes people all the way down at the bottom," Steir said.
Republicans in the Legislature are not too happy with the plan.
But the budget process just got a lot easier because the federal stimulus plan will give the state an extra $7 billion this year.
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