Pushing for Tax Cuts in Pennsylvania

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Policymakers in Pennsylvania seem bent on cutting taxes before the year is out... but how and for whom remains to be seen. After proposing his own Protecting Our Progress tax rebates earlier this year, Governor Ed Rendell last week suggested he could support a plan, put forward by Senate Republicans, that would expand eligibility for the state's so-called tax forgiveness credit. At present, single people with incomes up to $6,500 and married couples with incomes up to $13,000 receive a tax credit that completely eliminates any tax liability. (Individuals and families with slightly higher incomes receive credits that reduce, but do not eliminate, their tax liabilities.) The Senate Republican plan would ultimately raise those thresholds to $8,500 and $17,000 respectively. There's a catch, of course... the Senate Republican plan also calls for substantial business tax breaks, such as increasing the state's net operating loss carry forward and giving greater weight to sales in the state's corporate income tax apportionment formula. For more Pennsylvania fiscal information, visit the Pennsylvania Budget and Policy Center.

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