January 13, 2015


State & Local Taxes in 2015


Pennsylvania Tax Code Features

Progressive Features

• Provides non-refundable “tax forgiveness” credit to low-income taxpayers

• Sales tax base excludes groceries

Regressive Features

• Personal income tax uses a flat rate

• Fails to provide non-elderly taxpayers with refundable income tax credits to offset sales, excise, and property taxes

• Fails to use combined reporting as part of its corporate income tax

Tax Changes Enacted in 2013 & 2014

• 27 cent per gallon gas tax hike and 36 cent per gallon diesel tax hike being phased in

• Began closing the Delaware loophole, capital stock/franchise tax extended 2 years, new tax breaks for aircraft owners, banks, gas drillers, telecom companies enacted

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Pennsylvania has the 6th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Ap­pendix B for state-by-state rankings and more details).

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