Wolf tax proposal generates heat in governor’s race

In his latest campaign ad (above) Pennsylvania Democratic candidate Tom Wolf speaks directly into the camera.

“Have you seen Tom Corbett’s attacks on me? Get real. It’s Tom Corbett who ‘s been sticking it to the middle class on taxes,” Wolf says.

What’s provoked Wolf is the latest attack  ad from Gov. Tom Corbett, which charges that “Tom Wolf says as governor he’ll raise the state income tax on many middle class Pennsylvania families. Wolf thinks these hard-working Pennsylvanians just aren’t paying their fair share.”

The images that accompany those words are of nice young couples fretting over their mounting bills, and grainy black and white images of a heartless Tom Wolf.

Tax proposal emerges – sort of

The claim is based on Wolf’s proposal to change the way Pennsylvania’s income tax is levied. Unlike the federal income tax, which charges higher rates for big earners, the state has the same flat rate for everybody. Wolf wants to change that and make the tax more progressive. So is it true that Wolf’s plan would raise taxes on the middle class?

“It depends on what you mean by middle class,” said Stephen Medvic, professor of government at Franklin & Marshall College.

Wolf hasn’t outlined a specific plan, but last week he gave a hypothetical example of how it might work to Steve Esack of the Allentown Morning call: Make the first $30,000 of everybody’s income exempt from the tax, and raise the rate from it’s current 3.07 percent to 5 percent. That would mean the affluent would pay a higher effective rate than the poor.

An interesting analysis by Chris Comisac of the online news service Capitolwire concluded those rates would mean taxpayers earning less than $77,800 thousand a year would get a break. Anybody making more than that would see an increase.

I can’t link to the Capitolwire analysis because it’s a subscription service. But it concludes more than three-quarters of all tax filers would pay less under this scenario.

So yes, the ad is accurate in saying  that “many” working Pennsylvania  families would pay higher taxes under the plan. But it’s also true most would get a break.  Whether it whacks the middle class, Medvic says, depends on how you define the term.

The Corbett ad also repeats the charge that Wolf “moved his company to Delaware to keep from paying his fair share of Pennsylvania taxes.” This is at least an exaggeration. Wolf didn’t move his company to Delaware. It’s chartered there as many companies are, and he’s said repeatedly that he gets no tax advantage from that. I’ve written about that before, and you can read more here.

Where’s the beef?

Wolf’s campaign stresses that he hasn’t outlined a specific plan on the income tax because what’s needed will depend on how much revenue would come form other steps he favors, including a natural gas extraction tax, charter school reform and closing corporate tax loopholes.

It’s interesting that one of the things Corbett and the Republican State Committee have been attacking Wolf for is a lack of specific plans on pension reform and taxes.

“Challengers are often vague,” Medvic noted. “As soon as they become specific, there’s a plan you can pick apart. You can find a hypothetical person who may be harmed by that plan.””But there’s also a good policy reason to be relatively vague, and that’s because circumstances change,” Medvic said. “If a challenger takes office, circumstances may be different, so what they promised to do months before may no longer be realistic.”

Medvic said it’s probably more useful for voters to try to understand the values and principles that underlie a candidate’s stand on issues.

A couple of non-traditional polls suggest the race may be tightening some, though Wolf retains a substantial lead. It’s clear Wolf has decided to start swinging back at Corbett on the tax issue.

In his new ad, Wolf says Corbett cut education funding, forcing communities to raise property taxes. And he says Corbett “raised your gas taxes through the roof.” That’s an interesting charge, since the gas surcharge was a result of a transportation funding bill worked out last year with Democratic support, and which Wolf himself has praised.

 A role reversal

Medvic says he doesn’t see anything from either side so far that looks like a game-changer, but he finds it interesting that the Corbett ads constantly refer to his opponent as “millionaire Tom Wolf.”

“You know all of that’s very reminiscent of the Obama campaign against Mitt Romney,” Medvic said.”It’s interesting that Corbett is taking this kind of more populist approach to the campaign at this point, and I’ll be curious to see if that continues throughout the fall, because it’s a kind of role reversal. You know, the voters don’t typically expect the Republican candidate to be the one playing the populist card.”

The latest Corbett ad refers to his opponent as multi-millionaire Tom Wolf, and never says who’s a Republican or who’s a Democrat.