Speaker McCall Throws Support behind Income Tax Hike

Pressured by a looming June 30th budget deadline and Gov. Ed Rendell’s economic team, House Speaker Keith McCall of Carbon County announced yesterday his support for a 16% increase to the state income tax. Citing concerns over Pennsylvania’s $3.2 billion dollar deficit, McCall had few words to say on why he finally broke his budget silence. “My concern is it'll equate to significant property tax increases if we cut our way out of this”, said McCall. The reality is that McCall’s fear of property tax increases seems rather unfounded, given that the proposed state budget will already increase public education subsidies by 12%.

In an attempt to remain in good graces with Pennsylvania taxpayers, McCall also called for a 70% decrease in the corporate tax, placing it at roughly the same level as the proposed income tax according to CapitolWire (subscription). While this is a good move for Pennsylvania's economic competitiveness, this proposal could force all multi-state companies operating within Pennsylvania to pay the tax, regardless if their profit is generated elsewhere.

A Democrat from a largely rural and conservative district, McCall seems to desperately be trying to shift the focus away from why his constituents will be seeing such a large increase in their state income tax. Pennsylvania is one of the few states with both state and local income taxes, giving Pennsylvania the 16th highest per-capita state and local income tax revenue in the nation. More importantly, Pennsylvania has the 11th highest overall tax burden.