Pennsylvania

ITEP’s Kamolika Das Testifies on Pennsylvania’s Upside-Down Tax Code

Published

2 years ago

March 4, 2024

Below is written testimony delivered by ITEP Local Policy Director Kamolika Das before the Pennsylvania House Finance Subcommittee on Tax Modernization & Reform on March 1, 2024.

Good afternoon and thank you for this opportunity to testify. My name is Kamolika Das, I live in South Philly, and I’m the Local Tax Policy Director at the Institute on Taxation and Economic Policy or ITEP. ITEP is a non-profit, non-partisan tax policy organization. ITEP recently updated our flagship report, Who Pays?, which analyzes the distribution of state and local taxes across the income scale in all 50 states and D.C. This is the 7^th edition of the study and the most thorough version yet. It covers 99.7% of all state and local taxes, including the most minute taxes like Pennsylvania’s fireworks tax and dry-cleaning tax.

Our research finds that across the US, low- and middle-income families pay higher tax rates than the wealthy on state and local taxes. Nationwide households making under $24,000 a year pay 11 percent of their income on state and local taxes while the top 1%, households making over $730,000 a year, pay 7 percent.

Definitions of what constitutes tax equity or tax justice differ. Some people argue for flat taxes, where everyone pays the same portion of their income on taxes. Of course, this leaves lower-income people with far less income after paying for basic necessities. Others believe the rich should pay more because they have a higher ability to pay and because they owe some of their good fortune to the public services and social stability that government provides. Regardless of your definition, most tax systems, including Pennsylvania’s, are not fair or equitable. In fact, Pennsylvania’s regressivity far exceeds that of the national average. In Pennsylvania, the lowest 20 percent of earners pay an effective tax rate 2.5x higher as a share of income than the top 1 percent. So Pennsylvania ranks the 4^th most regressive tax system in the nation according to ITEP’’s Tax Inequality Index.

A common thread that we’ve identified in regressive tax systems is that state and local governments are heavily reliant upon regressive taxes on what people buy, or on their homes that they own or rent. Sales taxes inevitably require a larger share of income from low- and middle-income families than from wealthier families because sales taxes are levied at a flat rate and spending as a share of income falls as income rises. Since high earners can save a much larger share of their incomes than middle-income families—and since the poor can rarely save at all—the tax is inherently regressive. Same with housing since home values as a share of income tend to decline at higher incomes.

Often, when people think about state and local taxes, they solely focus on income taxes, but income taxes do not exist in isolation. This leads to the deep misconception that flat income taxes result in an overall flat tax structure. But in reality, given the fact that sales taxes and property taxes are both regressive, states need offsetting structures like graduated income tax rates to create an overall flat structure and satisfy the minimum standard of tax fairness.

Many states that are commonly perceived as “low tax” are often high tax for low-income families. ITEP analyzed flat tax states and graduated income tax states empirically and on average, low- and middle-income households pay lower rates in graduated income tax states. This is commonsense since flat tax states are not raising as much from the wealthy so they have to rely more heavily on everyone else. For example, households making $30,000 to $80,000 actually pay higher effective tax rates on all state and local taxes in Pennsylvania than they do in New Jersey.

Pennsylvania’s regressive taxes also makes it more difficult to invest in shared priorities like addressing the state’s inexcusable education opportunity gaps. Progressive taxation is positively correlated with higher overall tax revenue levels relative to the size of each state’s economy; taxing high-income families at lower rates will inevitably constrain revenue collections. While Pennsylvania’s wealthiest residents grew their collective wealth during the pandemic, the percent of families who are unable to afford the basics of housing, childcare, food, transportation, health care, and technology grew by 2 percentage points.

Tax policy is one tool to help reduce this inequality. If you look at the jurisdictions with the least regressive state and local tax systems (DC, Minnesota, Vermont, New York, New Jersey, Maine, and California) there are several common factors: graduated marginal income tax rates; targeted, refundable low-income credits; broad-based income taxes with limits on tax preferences for upper-income taxpayers; a higher reliance on taxes that take ability to pay into account; and a lower reliance on taxes on consumption.

Several states have made strides in lessening tax regressivity in the past few years.

New Mexico advanced 18 spots in our latest edition of Who Pays? by enacting a new state Child Tax Credit, a larger Earned Income Tax Credit for low-wage workers, a cut to the Gross Receipts Tax rate charged on the things New Mexicans buy every day, and a higher top income tax rate on the state’s wealthiest families. Washington state is no longer the single most regressive tax jurisdiction due to their recent enactment of a new tax on capital gains and the creation of a tax credit, similar to an EITC, for low- and moderate-income families. And Massachusetts voters dismantled their flat tax in November 2022 by adopting a constitutional amendment to impose a surtax on millionaires.

These decisions also have dramatic impacts on education funding. Massachusetts’ Fair Share Amendment is expected to raise more than $2 billion in revenue each year for public education and transportation infrastructure. This benefits the public, of course, but this is also a pro-business move since inadequate education and infrastructure revenues hurt economic growth. And just as a reminder, Pennsylvania policymakers in 2022 chose to cut the corporate income tax rate in half over eight years, with the cut not taking full effect until 2031. As a result, the cost will balloon from $127 million in 2023 to nearly $1.5 billion in 2031.

I realize that flat rate tax structures are enshrined in the state constitutions of Pennsylvania, Colorado, Illinois, and Michigan, therefore limiting the shovel-ready policy options available to this set of states. However, even within those limitations, lawmakers can take immediate steps to reduce the regressivity of Pennsylvania’s state and local tax system. Thank you and I’m happy to answer any questions.

Source link

Pennsylvania

Bethlehem man sentenced under Pennsylvania’s new AI child porn law

Published

5 hours ago

December 16, 2025

Press Room

Bethlehem man sentenced under Pennsylvania’s new AI child porn law

A Bethlehem man is among the first to be sentenced under a Pennsylvania law passed last year, making it a crime to possess AI-generated child sex abuse material.

On Monday, Lehigh County Court of Common Pleas Judge Kristie M. Marks sentenced 35-year-old Adam Erdman to two years, four months to 10 years.

Erdman in September pleaded guilty to felony possessing child sex abuse material. He faced a possible sentence of 5 to 10 years in prison.

Lehigh County District Attorney Gavin Holihan announced the sentencing in a news conference Monday afternoon. The DA credited U.S. Rep. Ryan Mackenzie, who introduced the new legislation and state Sen. Tracy Pennycuick, who championed the final version of the law last year.

“Before this law was passed, the use of AI to generate child sexual abuse materials went unpunished,” Holihan said. “Prosecutors like me need legislation like this to arrest and convict the criminals who use evolving technology to victimize others.”

Macungie-based attorney Michael Ira Stump, representing Erdman, couldn’t immediately be reached for comment Tuesday morning.

Bethlehem police on March 31 were called by Erdman’s estranged wife, who reported finding three AI-generated nude images of juvenile girls on his personal computer.

Prosecutors said Erdman downloaded photos of the children on vacation from their parent’s social media account, and then used artificial intelligence photo-editing software to make the children appear naked.

Erdman was charged on April 17.

The case was investigated by Bethlehem Police Det. Stephen Ewald and was prosecuted by Lehigh County Senior Deputy District Attorney Sarah K. Heimbach.

Source link

Pennsylvania

Central Pennsylvania awarded over $1M for Chesapeake Bay Watershed conservation

Published

18 hours ago

December 16, 2025

Press Room

Central Pennsylvania awarded over M for Chesapeake Bay Watershed conservation

PENNSYLVANIA (WTAJ) — Over $17 million has been awarded to county teams across the Commonwealth for projects in reducing nutrient and sediment pollution in the Chesapeake Bay Watershed.

Grants were awarded to counties with projects taking place over the next 12 to 24 months. Many different human activities cause nutrient pollution and eroded sediment to enter streams, rivers, and lakes. This pollution can come from fertilizer, plowing and tilling farm fields and can cause stripping away of trees and vegetation, and increasing paved surfaces.

Here are the grants awarded in our area:

Blair County Conservation District: $308,095
Cambria County Conservation District: $200,000
Centre County Government: $566,399
Clearfield County Conservation District: $368,209
Huntingdon County Conservation District: $409,134

“Pennsylvania’s clean water successes are rooted in collaboration—state, local, federal, legislative, and non-governmental partners, and of course landowners,” Department of Environmental Protection (DEP) Secretary Jessica Shirley said. “The work will continue to evolve, and our focus will remain on setting our collaborative partnerships up for success well beyond 2025. The momentum is real, and you can see it in our improved water quality.”

Get the latest news, weather forecasts and sports stories delivered straight to your inbox! Sign up for our newsletters.

In total, 222 projects were approved, and it’s estimated to reduce nitrogen by 113,493 pounds/year, phosphorus by 28,816 pounds/year, and sediment delivered to the Chesapeake Bay by 1.8 million pounds/year.

Source link

Pennsylvania

Inside the legislative effort to expel cellphones from Pa.’s K-12 schools

Published

1 day ago

December 15, 2025

Press Room

Inside the legislative effort to expel cellphones from Pa.’s K-12 schools

The case against a complete ban

There’s limited research available to date regarding the efficacy of school cellphone bans. Some studies, like one from 2024 at Auburn University, suggest such a policy could improve student engagement and social interactions with some limitations.

However, researchers at the University of Birmingham could not find much of a difference in academic and social outcomes between students who attended schools with cellphone bans and those who attended schools that did not.

School District of Philadelphia Superintendent Dr. Tony Watlington said in an interview with Philadelphia Magazine in August that he believes the decision is best made by each school.

“There are parents who feel very strongly that they need to be able to reach their children at all times, and there are others who feel the complete opposite,” Watlington told the magazine. “Cellphones can certainly be a distraction, but they can also be a walking library in the classroom.”

Some parents critical of legislative-level cellphone bans also highlight the need to reach their children in an era of school shootings and mass violence.

Santarsiero argued that cellphones, in those instances, may do more harm than good. Some school safety experts might agree.

Santarsiero recalled a time when he was a teacher where an armed robbery several blocks away prompted a lockdown at the school. Unaware of the robbery, he locked the classroom door, gathered his students to the corner of the room, away from the windows, and waited for instructions.

“We did that, and for the next hour and a half, before the incident was resolved, the kids started going on their phones, and they were texting home and really spreading a lot of rumors that turned out not to be true: that there was an armed shooter roaming the halls, that we were in imminent danger. And this was now filtering out to parents,” he said. “It was filtering out to other students, and it was creating a level of anxiety that was not helpful to trying to manage the situation.”

Pennsylvania School Boards Association, or PSBA, opposes Senate Bill 1014.

“While PSBA supports the goal of fostering learning-focused environments, the proposed legislation imposes a statewide, mandatory bell-to-bell ban on student cell phone use—stripping locally elected school boards of the ability to make decisions that best serve their communities,” the association wrote in a statement. “PSBA believes that locally elected school directors are in the best position to make decisions for their school communities concerning the use and possession of cell phones and other electronic devices in schools.”

According to PSBA, the bill “usurps local control.”

“PSBA also has some concerns with the wording of SB 1014, specifically the language regarding restriction of device possession and with the language regarding public comment,” PSBA wrote. “The bill would require schools to establish the manner in which a student’s possession of a device is to be restricted. It is unclear whether this language would require schools to take some sort of action to separate a student from their phone at the start of each school day (such as by purchasing and using lockable cell phone bags).”

Hughes said that officials must acknowledge the “good” that comes with the advancements in communication technology. However, he said the harm cannot be ignored.

“We need to have thoughtful conversations to come up with thoughtful policies that advantages the best of this technology, and minimizes the pain and the hurt that the technology can have on people — especially our children,” Hughes said.

The Senate is scheduled to return to session in January.

Source link