PA ranked #8 on Terrible 10 list
Updated On: Feb 01 2013 04:26:25 AM CST
Pennsylvania has landed on a top ten list, but it's not a good one to be on.
A Washington-based think tank, the "Institute on Taxation and Economic Policy," ranks the Keystone state eighth out of what it calls the "Terrible Ten" meaning states that have regressive tax systems.
That is where the income tax is one rate for everyone, so lower-income people are hit harder.
The lowest paid people are footing the majority of the tax burden in Pennsylvania according to a Washington D.C. research group.
"I don't think anybody really wants to soak the rich and make them pay infinitely more tax, but the tax system in America should be more fair," said state Representative Michael Schlossberg.
Pennsylvania has a flat tax. As a result, the research shows the lowest 20% of wage earners pays 12% of their income to the state in taxes.
The next highest group parts with 10.4% of their pay, the middle 20% pays 10.1% , the fourth 20% pays 9% in taxes.
And the top 1% of wage earners pays only 4.4% of their income to state taxes.
"If you have more money, you should be paying a higher percentage of your income for taxes," added Schlossberg.
Schlossberg thinks the way residents pay taxes should change.
His proposal is something that was voted down last year but may be revisited again in Harrisburg
"There was a bill last session that would have forced school districts to reduce the property tax and replace that revenue with a revamped sales tax," said Schlossberg. "Now the sales tax -- if done properly -- can be a much fairer tax."
Representative Schlossberg says a graduated income tax may be another option as long as everything is revenue neutral.
We'll see if any of these ideas gain traction in Harrisburg this time.
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