Cutting income tax

For too long, Pennsylvania’s Republicans have evaded the issues most pressing and important to… For too long, Pennsylvania’s Republicans have evaded the issues most pressing and important to Pennsylvanians. But it seems they’ve finally woken up.

House Republican legislators proposed a plan Monday to spur the state’s struggling economy. Part of the plan is a proposal to reduce the Pennsylvania personal income tax rate from 3.07 percent to 2.935 percent, according to the Post-Gazette.

Republicans say that such a reduction would put more money into the pockets of Pennsylvanians, which will help stimulate the economy through consumer spending. While the reduction would cause the state to lose about $450 million in revenue, Republicans said that the state would be able to make up for the loss with the $500 million surplus it expects to receive at the end of the current fiscal year.

Rep. Tom Quigley of Montgomery told the Post-Gazette, “Rolling back the PIT would benefit virtually every family in this state.”

So with a reduction in the income tax, the citizens will get more money, the economy will be revitalized, and everything will be sunshine and rainbows, right?

Not exactly.

While this is a respectable proposal and while it is refreshing to find that the Republicans are focusing on something other than constitutionally banning same-sex marriage, we believe they’re missing the bigger picture.

Cutting the income tax may put more money into the hands of Pennsylvanians, but what Pennsylvanians ultimately choose to do with that money will not necessarily stimulate the economy. Citizens will either save it, which will not benefit the economy, or they will spend it, which will only stimulate the market for consumer goods.

But the truth is that there is more to the economy than just the consumer market. What about solving the problems of the banking and lending system? What about tackling inflation? These are some of Pennsylvania’s most pressing economic dilemmas, problems that cutting the income tax will not solve.

Furthermore, instead of using the $500 million surplus to offset the $450 million revenue that the state would lose, why not use it to fix Pennsylvania’s crumbling infrastructure? Improving the infrastructure will create jobs. An increase in jobs will help stimulate the economy.

This plan is a positive one in theory, and it would be much more positive if Pennsylvania didn’t have any other economic problems to worry about. But unfortunately, it doesn’t address the full scope of the state’s economic troubles. And while it could help Republicans grab a few votes in the election (an offer for reduced taxes can be quite enticing), it is doubtful that the Democrats will allow the proposal to pass when the GOP plans to bring it to a vote in June.

But hey, at least the Republicans tried.