The General Assembly has doggedly rejected Governor Wolf’s proposals to provide assistance to Pennsylvanians with low incomes or those who are having trouble affording child care or housing or who are struggling to pay back student loans.

Yet it rushed today to reduce corporate tax rates.

For the last twenty years, discussion about ways to improve the economy of Philadelphia and create jobs has far too often focused on both the wrong goal and the wrong means.

The goal has not been to reduce poverty and income inequality and create economic opportunity for those with low incomes, especially, but not only for Black and brown people. Instead, it has been to pursue economic growth and jobs without regard for the impact on poverty.

The means has been cuts in business and wage taxes even though the evidence showing that this is an effective and efficient way of pursuing economic growth and creating more jobs has always been questionable. And there has been good reason to fear that tax cuts and the spending cuts or restraint they require would fail to reduce poverty and income inequality—or possibly make them worse. Meanwhile, we have too often ignored alternatives to tax cuts as a strategy for generating jobs while increasing economic equality.

The aim of this paper is to redirect this debate.

 

Thanks to the American Rescue Plan (ARP), Pennsylvania’s economy is recovering from the pandemic faster than most people expected. But many Pennsylvanians are still in need—and our state economy could be even stronger.

Governor Wolf and House and Senate Democrats have proposed the Brighter PA plan, a proposal to use $1.7 billion in American Rescue Plan funds to provide PA’s small businesses help to recover and everyday Pennsylvanians with the relief we need to pay rent and mortgages, afford childcare, access mental healthcare, pay off student debt, and more. The Republican-led General Assembly opposes it.  

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IN THE NEWS

The bill is also opposed by the Pennsylvania Budget and Policy Center, a progressive think tank based in Harrisburg. In a statement, Marc Stier, the organization’s director, said Kail’s legislation “includes no provisions to close corporate tax loopholes. HB 1960 will cost the state hundreds of millions of dollars per year,” Stier said. “Our initial estimate is that it will reduce state revenues by over $700 million in the fiscal year that begins on July 1, 2023.” Stier said those revenues should instead be used for education, housing, health care and child care.

Polling suggests that most Americans today favor raising revenue by taxing the rich, especially if we invest the funds in priorities that matter to working families — such as good jobs, affordable housing, and great schools. Well, here’s the good news: Pittsburgh can raise revenues by taxing the rich right now — without new state legislation — by making its income taxes fairer. We make this case in a new briefing paper, “Fair Taxation for Pittsburgh.”