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CPBJ Extra Blog

Breaking down the tax breakdown in Pennsylvania

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If you thought last week's dissection of numbers and charts and ranks in the state's banking industry was fascinating, then you're in for a treat this week.

The always fascinating “Facts & Figures: How Does Your State Compare?” report from the Washington, D.C.-based Tax Foundation came out Wednesday. It’s an annual ranking of where your state stands when it comes to almost 40 measures.

As it has been lately, Pennsylvania is somewhere between average and not good when it comes to how much it taxes its businesses and citizens.

We skate in some appreciated places — only 8 cents tax per gallon of beer, fourth lowest in the country! — but for the most part, we’re like most of our neighbors in the Northeast and Mid-Atlantic because individuals and businesses absolutely are paying their share of taxes compared to other parts of the country.

According to the report:

• Pennsylvania businesses are paying up. The state’s corporate tax flat rate of 9.99 percent ranks as the highest in the country.

• Pennsylvania has the 10th-highest state-local tax burden per capita at $4,374 in 2011, the latest year with available data.

• Pennsylvania’s state and local sales tax rate ,at 6.34 percent, is the 32nd-highest rate in the country.

• There are five taxes listed in the report that some states decide not to charge. Only one of them — estate tax — does Pennsylvania choose not to levy. Pennsylvania uses an inheritance tax, and only two states — Maryland and New Jersey — have both an estate and inheritance tax.

• Yikes. We all knew the new gas tax that went into effect Jan. 1 was bad, but the 41.8 cents per gallon that go to state taxes ranks as the fifth-highest in the country. That’s probably not in the brochure when economic development officials try to lure a trucking company into the state. And it’s only going to get higher.

• Thoroughly confused yet? Wait till I get going! But if you are, here’s a simple ranking based on Tax Freedom Day, the day in each state where taxpayers have worked long enough to pay off their tax bill for the year. In Pennsylvania in 2013, that day was April 17, the 15th-latest in the country.

Sounds bad, but Pennsylvania was doggone cheap compared its neighboring states. New York (second), New Jersey (third), Maryland (eighth) and Virgina (10th) all ranked higher, while Ohio and Delaware tied for 22nd.


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