Are Pennsylvanians overtaxed?

On the day before Pennsylvanians send their 2002 tax returns to Washington, Harrisburg, and their local governments, they will have finally earned enough to pay their federal, state and local tax bills for 2003.

According to calculations by the Washington D.C.-based Tax Foundation, April 14^th is Pennsylvania’s 2003 “Tax Freedom Day”—the day on which Pennsylvanians can begin working for themselves and their families instead of the government.  Interestingly, Pennsylvania is just one of 13 states in which Tax Freedom Day falls later on the calendar in 2003 than in 2002.

The Tax Foundation study, which has been conducted annually since the early 1970s, calculates an overall effective tax rate for each state and for the nation by dividing total federal, state and local taxes per capita by per capita income.  Multiplying the result by 365 then determines how many days into the year Tax Freedom Day falls—in Pennsylvania’s case, 104 days into 2003.

Commonwealth Foundation Matthew J. Brouillette said governments at all levels should work harder to place “Tax Freedom Day” earlier on the calendar by capping spending and dramatically cutting taxes—measures that have proven to be successful economic development policies in growing states.  He noted, however, that Gov. Ed Rendell’s $5 billion  tax-borrow-and-spend “Plan for a New Pennsylvania” represents exactly the opposite approach.

“For the first 3½ months of 2003, Pennsylvania taxpayers effectively became government employees,” said Brouillette.  “But if Gov. Rendell gets his way, those taxpayers can expect to spend even more time laboring for the state next year, rather than for themselves and their families.”