If Pennsylvania’s latest proposed budget comes to fruition, the Keystone State could see a raise in sales tax for the first time in 50 years.
Rates would increase from 6 percent to 7.25 percent, according to the framework legislators laid out Tuesday night. Up to an additional 2 percent in local sales taxes could be tacked on to the rate, meaning certain areas could pay up to 9.25 percent — making it the second highest in the country.
A projected $2 billion would be generated in revenue, poised to be put toward property tax relief.
Critics of the tentative plan, which would increase taxes by $500 million, feel there are changes to state programs that could raise funds without putting the burden on the taxpayer.
“Before we ask Pennsylvanians to pay more for everyday purchases, the governor and lawmakers should ensure all other options have been explored,” Matthew Brouillette, president and CEO of the Commonwealth Foundation, said in a statement. “That means enacting real public pension reform that puts the state back on a fiscally-responsible track, generating revenue by privatizing the state liquor monopoly, and cutting off the corporate welfare gravy train by eliminating unfair business subsidies.”
State Lawmakers have been at a stalemate over the budget for the past five months. Wolf’s proposal was voted down last month due to Republicans’ opposition to increasing the state’s income tax by 16 percent.
“Simply ending unnecessary corporate welfare programs would save nearly $700 million annually. And it wouldn’t cost taxpayers a dime,” Brouillette said.
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