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Wolf criticizes tax reform plan

HARRISBURG — Gov. Tom Wolf criticized a Republican tax-cutting package in Congress, saying Tuesday that it would amount to a tax increase on middle-class Pennsylvanians by ending a state and local tax deduction.

Getting rid of the deduction used by nearly 1.8 million Pennsylvania filers in 2015 — or almost one-third of all filers that year — amounts to the federal government rolling its problems downhill onto state taxpayers, Wolf said.

Wolf, a Democrat, joined Pennsylvania Democratic U.S. Sen. Bob Casey in criticizing the provision in a wider $6 trillion plan under construction by Republicans. Trump administration officials have contended the deduction forces the rest of the country to subsidize homeowners in high-tax, big-spending states.

In response to pushback by some Republicans, the plan’s House Republican architects now say they will keep the deduction for local property taxes. But Wolf said he still sees it as a shift in costs that will force Pennsylvania taxpayers to pay more.

Republican leaders are writing the critical tax legislation in secret with Democratic lawmakers excluded and no hearings planned before formal drafting begins. If the state-local deduction were entirely repealed, it could provide more than $1 trillion over 10 years to help pay for the deep tax cuts under the overhaul plan.

According to IRS data from 2015, Pennsylvanians claimed deductions for nearly $20 billion in income, sales and property taxes paid. That was sixth most among states, or an average of about $11,200 for the 6.2 million tax filers that year.

The averages were at least $12,300 or higher in Allegheny County and four suburban Philadelphia counties, according to an analysis of the data by the National Association of Counties.

The national average was about $12,500.

Property taxes were $8.2 billion of Pennsylvania’s total claimed that year, with $11.3 billion going to income taxes and $153 million going to sales taxes.

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