In Most PA Counties, Few Would Be Affected by Ending High-income Tax Cuts

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President Obama’s proposal to end tax breaks for high-income earners would have very little impact on taxpayers in most Pennsylvania counties, according to a new analysis by the Pennsylvania Budget and Policy Center (PBPC).

In over half of Pennsylvania’s 67 counties, fewer than 1 in 100 residents (1%) would pay the higher marginal tax rate on income above $200,000 for individuals and $250,000 for married couples.

In most counties, only a small number of individuals are affected. In 24 counties, fewer than 200 high-income earners would pay the higher rate. Almost two-thirds of the top earners who would be impacted reside in just six Pennsylvania counties.

The PBPC estimates, based on 2010 taxable income data published by the Pennsylvania Department of Revenue, show that, in most Pennsylvania counties, very few taxpayers and only a small share of county income would be impacted by higher federal income tax rates that phase in at $250,000.

Few taxpayers impacted:

  • In seven counties, six of them rural, fewer than 1 in 200 taxpayers (one-half of 1 percent) would be impacted by higher tax rates: Perry, Fulton, Carbon, Northumberland, Juniata, Huntingdon, and Mifflin.
  • In another six mostly-rural counties, fewer than 1 in 150 taxpayers (seven-tenths of 1 percent) would be impacted by higher taxes on incomes above $250,000: Clinton, Bedford, Schuylkill, Fayette, Snyder, and Armstrong.
  • In another 24 counties, all but four of them rural, fewer than 1 in 100 taxpayers (1 percent) would be impacted by higher taxes on incomes above $250,000: McKean, Venango, Somerset, Jefferson, Crawford, Pike, Monroe, Wayne, Clearfield, Beaver, Adams, Franklin, Cambria, Lawrence, Lebanon, Mercer, Warren, Columbia, Elk, Philadelphia, Indiana, Lycoming, Luzerne, and Blair.

Small portions of county income impacted:

  • In 14 counties, taxpayers earning more than $250,000 account for less than 10% of total county income; in another 19 counties, taxpayers earning more than $250,000 account for 15% or less of county income.
  • Congressional Districts 5, 9, and 12 are heavily rural districts that fall in areas with few taxpayers that would be impacted by increases in tax rates on those with incomes above $250,000. Three other Congressional Districts—10, 11, and 18—fall primarily within counties in which only small numbers of taxpayers would be impact by higher tax rates on those earning more than $250,000.

Suburban counties:

  • Six counties would experience the greatest impact from higher taxes on incomes over $250,000: the four suburban Philadelphia counties, Philadelphia and Allegheny County, which includes the city of Pittsburgh. Almost two-thirds of the wealthiest 2 percent of taxpayers reside in these six counties. Only one in 31 taxpayers (3.2 percent) in these six counties would be impacted by higher tax rates on those earning more than $250,000.

Under President Obama’s plan, families earning over $250,000 would keep other tax breaks on the first $250,000 of income, including a lower bottom tax rate and preferential tax rates on capital gains and dividends – a savings of $12,112 per taxpayer. The top tax rates would be restored to those in effect in the 1990s when the nation added 23 million jobs.

Maps: How Many High-Income Earners Would Be Impacted?

Map 1. Percentage of Taxpayers in Each PA County with Incomes Over $250,000

Map 2. Number of Taxpayers in Each PA County with Incomes Over $250,000

Tables

View Tables Detailing Number of High-Income Earners by County