Rabb announces reintroduction of tax fairness bill with colleagues

HARRISBURG, April 27 – State Reps. Chris Rabb, D-Phila., announced today that he is drafting legislation that would establish a fair share tax plan in Pennsylvania, changing the state’s longstanding regressive income tax.

According to a 2019 report from the Pennsylvania Budget and Policy Center, 20% of families with the lowest incomes pay roughly 14% of their income on state and local taxes, while those in the top 1% only pay 6%.

“It’s the height of absurdity that the bottom 60% of income earners are, on average, paying nearly double the tax rate of what the richest Pennsylvanians pay,” Rabb said. “This legislation will not only make the tax system fairer, but it will work to reduce the overall budget deficit. That’s a win-win. Everyone should pay their fair share.”

One of the following three versions of the Fair Share Tax Plan will be turned into legislation:

  • Option 1 would decrease Personal Income Tax on wages and interest from 3.07% to 2.8% and increase the income tax on passive income from things like net profits, dividends, net gains derived from rents, royalties, etc. to 6.5%, raising $2.6 billion in new tax revenue.
  • Option 2 would decrease the income tax on wages and interest to 1.9% and increase the tax on passive income to 12%, raising $6.22 billion in new tax revenue.
  • Option 3 would be a compromise between options 1 and 2, by decreasing the income tax on wages and interest to 2.35% and increasing the tax on passive income to 9.25%.

“People in our state work hard and deserve not to pay taxes that are unfairly high. For too long, the very richest Pennsylvanians have gotten away with not paying their fair share, because of our upside-down tax structure in Pennsylvania,” Fiedler said. “The Fair Share Tax Plan creates a tax system that works for working people: one based in fairness and equality. It’s time to make Pennsylvania work for everyone, and having a fair tax system is an important start.”

Reps. Elizabeth Fiedler, D-Phila, Rick Krajewski, D-Phila, Sara Innamorato, D-Allegheny, and Joshua Seigel, D-Lehigh, are co-prime sponsors on the legislation.