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Pennsylvania has the Twenty-Second Highest State and Local Tax Burden in the Nation for FY 2016

Apr 01, 2018

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In Fiscal Year (FY) 2016, Pennsylvania collected $65.6 billion in state and local taxes—or $5,129 for every man, woman, and child. While this is an impressive sum of money, it tells us little about whether or not the average Pennsylvania taxpayer can afford this level of taxation?

 

To better answer this question, this analysis will calculate Pennsylvania’s tax burden relative to the private sector. Ultimately, it is the private sector that creates new wealth and income. A high tax burden means a state is hobbling its private sector relative to other states and reducing their long-run economic growth potential.

 

 

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

 

Unfortunately for taxpayers, as shown in Chart 1, Pennsylvania’s state and local tax burden (tax collections divided by private sector personal income) was the twenty-second highest in the nation for FY 2016 at 14.3 percent—or 1 percent above the national average of 14.3 percent (note: due to rounding, Pennsylvania and national average only appear equal).

 

Chart 1 Pennsylvania State and Local Tax Burden FY 2016.jpg

 

#Pennsylvania state and local #taxburden in FY 2016 was the 22nd highest in the nation at 14.3%— 1% above US average of 14.3% http://bit.ly/2FX9C8F @keypolicydata #PApolitics #PApol #PAleg #PAsen #PAgov #PolicyData (click to tweet)

 

As shown in Chart 2, Pennsylvania’s tax burden has increased over time by 120 percent to 14.3 percent in FY 2016 from 6.5 percent in FY 1950.

 

Chart 2 Pennsylvania State and Local Tax Burden by Type of Tax FY 1950 to 2016.jpg

 

#Pennsylvania state and local #taxburden has increased 120% between FY 1950 (6.5%) to 2016 (14.3%) http://bit.ly/2FX9C8F @keypolicydata #PApolitics #PApol #PAleg #PAsen #PAgov #PolicyData (click to tweet)

 

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

 

 

As shown in Chart 3, Pennsylvania’s 14.4 percent tax burden is greater than these combined industries: manufacturing (9.8 percent), educational services (3.1 percent), and utilities (0.8 percent).

 

Chart 3 Pennsylvania State and Local Tax Burden vs. Major Industry FY 2016.JPG

 

#Pennsylvania state and local #taxburden > manufacturing, educational services, and utilities http://bit.ly/2FX9C8F @keypolicydata #PApolitics #PApol #PAleg #PAsen #PAgov #PolicyData (click to tweet)

 

Pennsylvania’s higher than average state and local tax burden is driven by a significant individual income tax burden (3.7 percent, 19th highest), corporate income tax burden (0.6 percent, 11th highest), and all other tax burden (2.6 percent, 16th highest) which is partially offset by other lower taxes such as the sales tax burden (2.4 percent, 13th lowest).

 

Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in Pennsylvania—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.

 

The 20 Pennsylvania counties with the highest local government tax burden include:

 

  • Forest County, PA (36.7 percent)
  • Monroe County, PA (12.7 percent)
  • Wayne County, PA (12.0 percent)
  • Centre County, PA (9.7 percent)
  • Philadelphia County, PA (9.6 percent)
  • Sullivan County, PA (9.3 percent)
  • Dauphin County, PA (8.8 percent)
  • Northampton County, PA (7.5 percent)
  • Berks County, PA (7.3 percent)
  • Potter County, PA (7.2 percent)
  • Tioga County, PA (7.0 percent)
  • Indiana County, PA (6.8 percent)
  • Greene County, PA (6.6 percent)
  • Allegheny County, PA (6.5 percent)
  • Lackawanna County, PA (6.3 percent)
  • York County, PA (6.3 percent)
  • Carbon County, PA (6.3 percent)
  • Lycoming County, PA (6.2 percent)
  • Columbia County, PA (6.2 percent)
  • Luzerne County, PA (6.2 percent)

 

The 20 Pennsylvania counties with the lowest local government tax burden include:

 

  • Mifflin County, PA (5.3 percent)
  • Pike County, PA (5.3 percent)
  • Clearfield County, PA (5.1 percent)
  • Franklin County, PA (5.0 percent)
  • McKean County, PA (5.0 percent)
  • Westmoreland County, PA (5.0 percent)
  • Montgomery County, PA (4.9 percent)
  • Montour County, PA (4.7 percent)
  • Warren County, PA (4.7 percent)
  • Elk County, PA (4.7 percent)
  • Blair County, PA (4.6 percent)
  • Northumberland County, PA (4.5 percent)
  • Bedford County, PA (4.5 percent)
  • Huntingdon County, PA (4.5 percent)
  • Chester County, PA (4.5 percent)
  • Butler County, PA (4.2 percent)
  • Washington County, PA (4.2 percent)
  • Jefferson County, PA (4.2 percent)
  • Fayette County, PA (4.0 percent)
  • Juniata County, PA (3.6 percent)

 

Chart 4 Pennsylvania Local Tax Burden by County FY 2016.JPG

 

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

 

Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 66 years! See if your state has been above or below the national average?

 

 

 



Category: Tax Burdens

J. Scott Moody

Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.


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