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Wage tax hike being considered in Pennsylvania

Friday, May 29th, 2009

As Pennsylvania’s projected budget deficit keeps rising, some Democrats say an increase in the personal income tax, or P-I-T, is the best way to make up revenue. But Republicans disagree, and Governor Rendell says he’s hoping to avoid that discussion.

House Appropriations Committee staffers are projecting a 3.2 billion dollar deficit by the end of June, and next year’s estimates are equally dismal.

Johnna Pro, the spokeswoman for Committee Chair Dwight Evans, says targeted tax increases already proposed by Governor Rendell aren’t enough to make up that gap, and lawmakers have begun discussing the feasibility of raising the state’s personal income tax.

Pro: Every one-tenth of a percent increase raises roughly 300 million dollars. So we could do something minor and draw in the dollars that we need to draw in to get a new budget to balance.

Pennsylvania’s PIT is currently 3.07 percent, and was last raised in 2003. House Minority Leader Sam Smith says Democrats have been looking for a way to raise income taxes all year, but he says that’s a bad policy during an economic slump. Governor Rendell says an income tax hike should be the last resort lawmakers consider.

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