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At Least Our Gov. Wolf and Other Row Officers Are not Trying to LOWER Wages, CUT Health Coverage, and POISON Residents

October 24, 2018 - 11:23am

We at Keystone Research Center and the We the People - Pennsylvania campaign know that a major challenge for Pennsylvania and for the nation is to enact policies that make the economy less rigged against working families.  

A new report shows that, in more than half of U.S. states, stunningly, statewide officials have been trying to rig the economy further against working families by pursuing lawsuits that would lower workers’ pay, reduce health care coverage, and increase the number of state residents with mercury poisoning.

Pennsylvania has not been party to these attacks on working families. That’s thanks in part to Governor Tom Wolf and Attorney General Josh Shapiro…and could change if they were not in office.

Cutting workers’ pay: Twenty-one states, led by Nevada Attorney General Adam Laxalt (now running for governor) brought suit to block an attempt by President Obama to give 12.5 million salaried workers across the country making less than $47,476 overtime pay if they worked more than 40 hours (four other states, led by Missouri Attorney General Josh Hawley, now running for governor, later joined the suit). The suit led a Texas court to overturn the new Obama overtime rule in a highly-questionable ruling. PA did not join the suit: even better, Governor Wolf stepped up raise PA workers’ pay by restoring overtime pay and the 40-hour week for hard-working and underappreciated managers and other salaried workers.

Eliminating health care coverage and protections for people with pre-existing conditions: Prior to the Affordable Care Act (ACA), insurance companies frequently discriminated against people with pre-existing conditions by denying them coverage or charging them outrageous prices. The ACA prohibited discrimination against people with pre-existing conditions. Since its passage, the ACA has been under unrelenting attack from conservative opponents. Although efforts to totally repeal the ACA have failed, Congress did raise premiums and reduce coverage through the 2018 Tax Cuts and Jobs Act (TCJA). And now 20 states are trying to accomplish through the courts what conservatives could not accomplish through the legislative process. The lawsuit has no legal merit but the Trump administration has taken the position that the ACA’s protections for people with pre-existing conditions must be struck down. If this suit wins, the ACA’s protections for people with pre-existing conditions would be eliminated, as would other popular provisions, such as the Medicaid expansion implement in Pennsylvania under Governor Wolf.

Poisoning the air: Under President Obama, a new rule limited power plants’ release of mercury into the air, leading to 11,000 fewer deaths per year according to the EPA, as well as 130,000 fewer asthma attacks and $90 billion in health benefits. In 2016, 15 states brought a suit to overturn the rule, led by Michigan Attorney General Bill Schuette, who is now running for governor (and perhaps wants Michigan’s air quality to match it’s water quality). This led the Trump administration to reconsider the standards.

In these challenging times, Pennsylvanians and Americans need to understand who is for an economy rigged less against working families...and for raising Pennsylvanians’ pay, giving them access to health care, and protecting their health.

Pennsylvania’s Terrible Tax Code Asks More Of You As You Make Less: Hitting Community’s of Color Especially Hard

October 23, 2018 - 5:46am

The Commonwealth once again claims its spot in the “Terrible 10” most unfair tax structures in the nation. The lowest 20% of income earners in the state pays more than double (2.3 times) their share of family income on state and local taxes than the top 1%.

Income inequality remains a growing problem in our state, as the top 1% earn on average 21.7 times that of the bottom 99%. While fixing our state’s growing inequality goes beyond tax policy, state tax structures can make things better and at the very least, not make them worse.

However, making inequality worse is just what Pennsylvania’s tax structure does. The Institute for Taxation and Economic Policy (ITEP) came out with their sixth edition of their annual report, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. The primary question researchers at ITEP ask here is whether incomes are more equal, or less equal, after state taxes than before. Pennsylvania not only makes things worse for low- and middle-income earners, we rank 7th worst in the nation.

As the Figure below shows, the lowest 20% (earning less than $19,100 a year) are paying 13.8% of their family income on state and local taxes – more than any other income group. The top 1% (earning $511,000 and above), in contrast, pay only 6.0% of their share of family income on state and local taxes.

Pennsylvania’s tax structure is playing a role in worsening the racial wealth gap as well. As the figure below shows, Black Pennsylvanians are twice as likely to be in the highest-taxed/lowest-income fifth than white Pennsylvanians – 35% of Blacks fall within the lowest 20% compared to 17% of whites. Latinx Pennsylvanians also have a higher likelihood (28%) of falling within this category and therefore facing higher effective tax rates.

ITEP includes state personal income taxes, property taxes and sales and excise taxes in their calculations for each state. Sales and excise taxes are very regressive, meaning these taxes take a greater share from those with lower incomes, because poor families spend a greater proportion of their income on goods that are taxed. Property taxes are typically somewhat regressive as well. The way that states typically make up for this regressivity is having an intentionally progressive personal income tax structure (those with higher incomes are taxed at a higher rate), so that the tax burden doesn’t fall so heavily on low-income individuals. Pennsylvania does not, and actually is one of only nine states that does not have a progressive personal income tax. Pennsylvania has a flat personal income tax rate of 3.07%, meaning all income of people are taxed at this same rate. We also offer no deduction or personal exemptions to reduce taxable income, nor do we provide refundable tax credits.

The major challenge to changing this in Pennsylvania is our Constitution’s uniformity clause, which states that any class of income must be taxed at one rate, meaning a graduated or progressive personal income tax is not allowed.

However, the We the People campaign and we at the Pennsylvania Budget and Policy Center have a solution to this problem. The Fair Share Tax would divide our personal income tax into two separate taxes (so the uniformity clause is no longer an issue) – income on wealth  which includes dividends, royalties, capital gains, business profits, etc. and income on wages and interest. Taxes on income from wages and interest would decrease from 3.07% to 2.8%, reducing taxes for 60% of Pennsylvanians who feel the impacts of our current upside-down tax structure. Taxes on income from wealth would increase from 3.07% to 6.5%, with 60% of the tax revenue coming from the top 1%. This tax would raise $2.22 billion in new revenue in 2019-20 that can be invested in things like education, human services and protecting the environment – things that benefit all of us, not just the wealthy few.

Our state taxes should be structured in a way that raises needed revenue in the state and ideally decreases inequality. Instead our current system exacerbates existing income and racial disparities. There is a better way.

Tax Cuts and Jobs Act Will Supercharge Racial Wealth Divide, Finds First-Time Analysis

October 11, 2018 - 12:43pm

Pennsylvanians, even more than other Americans, strongly support fair taxation—because Pennsylvania’s tax system is one of the most unfair in the nation, taxing middle- and low-income families at much higher rates than the richest 1%. Yet when Congress passed huge tax cuts on a party line vote last year, it made the U.S. tax system much less fair, with most of the benefits going to the richest Americans—72% of the individual tax cuts go to the top 20% of families, with the corporate tax cuts also tilted towards the richest Americans.

new report from the Institute on Taxation and Economic Policy released today highlights another way that the Tax Cut and Jobs Act increases economic inequality: it rewards existing White wealthy families at the expense of the economic security of households of color as well as at the expense of the middle class and poor. On average white households will receive over $2,000 in cuts compared to less than $1,000 for white Latino and Black households. The struggles families of color have accumulating wealth is one of the powerful ways that racial inequality in America gets transmitted across generations (because families cannot afford college, a house, retirement savings or to save enough to stop living paycheck to paycheck). In the future, the huge deficits resulting from this tax cut could also lead to reductions in spending that hurt middle- and lower-income families of all races and ethnicities, while also reducing economic growth.

Members of Congress who supported this tax cut revealed through their action a preference for an economy that works for the mostly-white 1% rather than an economy that works for all Americans. The PA representatives who voted for the tax cut  who are running for reelection or—in the case of Lou Barletta, for U.S. Senate—include Barletta, Brian Fitzpatrick, Mike Kelly, Tom Marino, Keith Rothfus, Lloyd Smucker, Scott Perry and Glenn Thompson.

Go here for more  information on the new ITEP report and here to access the social media toolkit so that you can help spread the word.

Speaker Turzai Offers Up A Fake Redistricting Reform Plan

September 21, 2018 - 3:48pm

Speaker Turzai has recently floated a proposal for legislation to delegate the process of drawing congressional district lines to a commission modeled after the process used for drawing legislative districts that is embedded in the PA Constitution. The legislative districting commission consists of one member appointed by the majority and minority caucuses and fifth member appointed by those four. If they cannot agree on a fifth member, according to the PA Constitution, the Supreme Court chooses that person.

We have various ideas about what real redistricting reform looks like. But we agree that this proposal is not it. We urge Speaker Turzai not to advance this proposal in the remaining days of the legislature this year. If he does, we urge the General Assembly to reject it for three reasons.

First, we note that there is absolutely no rush to advance a legislative proposal in the waning days of this General Assembly for a redistricting process that will not take place until 2021. This is not the time to be considering a major change in a critical process, especially when it might stand in the way of consideration of real reforms in the next year.

Second, advocates for redistricting reform have been critical of the heavily politicized process by which legislative districts are currently drawn. It is hardly redistricting reform to use the same process for congressional districts.

Third, we fear that if his proposal were to be considered this year, Speaker Turzai would pull a bait and switch and advance a proposal that gives the Commonwealth Court, not the Supreme Court, the power to appoint the fifth member of a congressional redistricting commission. Given that Republicans control the Commonwealth Court, this would give Republicans a 3-2 majority and the power to draw congressional districts gerrymandered in their favor.

In 2018, Speaker Turzai has stood in the way of redistricting reform, and he may be putting this proposal forward to portray himself as a reformer. For the reasons we have indicated, we do not find this plausible.

2017 Census Release: Health Care Coverage in Pennsylvania

September 18, 2018 - 9:36pm

By Shelley Aragoncillo and Diana Polson

The number of Pennsylvania’s uninsured hovers around 5.5% of the state’s population, nearly half of what it was in 2010 before the Affordable Care Act and the expansion of Medicaid.

Despite every attempt to kill it, the Affordable Care Act (ACA) continues to keep the uninsured rate down in Pennsylvania. The year 2017 marks the lowest number of uninsured in Pennsylvania.   According to the newly released 2017 Census numbers, Pennsylvania’s uninsured are 5.5% of the population, or 692,000 individuals without insurance, significantly below the national average of 8.7% uninsured.   As the graph below shows, in 2010, prior to the passage and roll-out of the ACA, the uninsured rate was 10.2% of the population in Pennsylvania, or 1.3 million people. This uninsured rate was at its highest in 2010, two years after the 2008 recession. As the ACA began rolling out, the percentage of people without insurance began to drop. Pennsylvania’s participation in Medicaid expansion, which began in 2015, further reduced the percentage of people going without insurance.   States participating in Medicaid expansion have significantly fewer uninsured than states who have refused to participate, and that gap is growing. As the Center on Budget and Policy Priorities graph below shows, in 2017 Medicaid expansion states had an uninsured rate of 6.6%, compared to the 12.2% uninsured in those states not participating in expansion. Pennsylvania’s uninsured is lower than the average uninsured rate of all Medicaid expansion states: 5.5% compared to the national average of 6.6%.   Uninsured Rate Gap Between Medicaid Expansion States and Others Widening

The Trump administration has made efforts to kill the ACA by creating barriers to enrollment: pulling sign-up info from the website; cutting the advertising budget by 90 percent and sign-up assistance programs by 41 percent; and cutting the 2018 enrollment period in half.    In Pennsylvania, the Wolf administration has worked to combat the federal efforts to sabotage enrollment, and so far, it has had some success. During the 2018 open enrollment season, the Pennsylvania Insurance Department launched an outreach campaign to make up for the cuts in marketing on the federal level. The department also made coverage more affordable by mitigating the number of people subject to premium increases due to the fed’s elimination of cost-sharing reduction reimbursements. As a result, 396,725 individuals signed up for health insurance via the exchange in 2017—below last year’s sign-ups, but not as significant as it would have been without the state’s efforts at curbing federal changes.   Health insurance rates will also be more modest than what was feared. This summer, health insurers in Pennsylvania filed plans for 2019 and requested an increase in insurance rates of 4.9%, which is significantly below requested increases nationally and in neighboring states. In Pennsylvania’s neighboring states, insurers have requested 2019 rate increases of more than 20%.   Given the federal attacks on the ACA and ongoing attempts to stymie its success, Pennsylvania is doing pretty good comparatively, thanks to the Wolf administration’s deliberate acts to protect it. But, before we pat ourselves on the back, we cannot forget the nearly 700,000 people in our state that remain without any health care coverage at all. Far too many others may have “coverage,” but it is too expensive to actually get them the care needed. We need to continue to fight for a medical system that values people—health and healing for its own sake, not for profit.   For more information, see: