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State Income Taxes
To the Editor:
Thanks to David Rowe, state representative for the 85th District, and his legislative aide, Angela Goodwin. The state income tax information presented here is accurate and up to date.
If you are a wealthy person with a $1 million taxable income and you don't like paying taxes, where would you choose to live? You could choose Alaska (where the government shares oil revenue with taxpayers,) Florida, Nevada, South Dakota, Tennessee, Texas or Wyoming because those states do NOT have a state income tax.
If you were the person mentioned previously, where would you choose NOT to live? The income tax rate on a $1 million taxable income in California is 12.30% for a married couple filing jointly and 13.30% for a single filer. Hawaii's state income tax rate for a single filer is 11% on a taxable income of $200,000 and 11% on $400,000 for married couples. The District of Columbia and New York have very high-income tax rates for the higher taxable income taxpayers.
Pennsylvania and 11 other states have flat-rate state income tax rates, but seven of those states have a standard deduction for lower income taxpayers. Arizona (2.5%) has a lower tax rate than Pennsylvania (3.07%) and also has a standard deduction for both single and married taxpayers. Pennsylvania does not have a standard deduction. New Hampshire taxes interest and dividends only at a 4% tax rate, and Washington taxes only capital gains over $250,000 at a 7% tax rate.
Without passing a state constitutional amendment legalizing a graduated income tax, Pennsylvania legislators could lower income tax rates for lower income taxpayers and sales taxes for all taxpayers. How would this be possible?
First, Pennsylvania legislators could amend current state income tax law to establish a $25,000 standard deduction for single filers and $50,000 for married couples. Second, Pennsylvania lawmakers could increase the current income tax rate high enough to lower the sales tax rate to 3%. Yes, the wealthy would have to pay a fairer share of state taxes.
David Faust
Selinsgrove