Pa. Senate Republicans propose ‘historic’ tax cut to counter Democrats’ desire to spend more

Senate Republicans are proposing a historic tax cut for Pennsylvanians that includes taking the personal income tax back to 2003 levels and lower electric bills.

An amendment offered Monday afternoon to a bill granting a tax credit to volunteer emergency medical technicians was approved on 11-5 party-line vote by the Senate Rules Committee that calls for lowering the 3.07% tax rate to 2.8% and eliminating the 140-year-old gross receipts tax on electricity.

Democrats voted against it, saying they had only received the proposed amendment calling for a major tax code change an hour before the meeting and they did not have time to review it.

Senate Majority Leader Joe Pittman, R-Indiana County, said the bill would save Pennsylvanians a total of $1.7 billion from the personal income tax cut and $1.2 billion from the elimination of the tax on electricity.

Pittman indicated this is a marker his caucus is putting down for the start of budget negotiations to counter the House Democratic majority and Gov. Josh Shapiro’s calls for new spending thanks to the $14 billion in reserve accounts.

“There’s been a lot of discussion about $3 billion of additional spending. Our point of view is if we’re going to invest $3 billion, we should invest it back into the taxpayers,” Pittman said. “We fundamentally believe when you allow taxpayers and consumers of electricity to keep more of what they earn that they are best decide how to reinvest that into our economy. We believe lower tax structures help further grow an economy and in this case we would be lifting all boats.”

Besides that, he said Democrats seem to think that if you have too much money in your savings account, it should be spent on new priorities or bolstering funding for existing budget lines.

“Our argument is if you think there’s too much money in our savings account, it should be returned to those who put it there in the first place, which is the taxpayer,” Pittman said.

Gov. Shapiro’s proposed budget calls for boosting general fund spending to $48.3 billion from this year’s $44.6 billion and that includes $1.1 billion more in funding for public schools, $50 million for whole home repairs, $283 million for mass transit, $600 million for economic development initiatives and more money for higher education and for Pennsylvanians with intellectual disabilities.