This Tax Day, Nearly All Working Pennsylvanians Are Paying Less

April 15, 2010

Today marks the annual deadline to file state and federal income taxes. As last-minute filers rush to mail their returns before the Post Office closes late tonight, let's take a moment to put "Tax Day" in perspective.

Nearly every working Pennsylvanian and working American is getting a tax cut in 2009, thanks to the American Recovery and Reinvestment Act. Recent polling, however, has shown that most people don't know that.

Citizens for Tax Justice has released a new analysis showing that we are, in fact, paying less this Tax Day. By their calculation, 99% of working Pennsylvanians and 98% of working Americans received tax cuts in 2009. Working people in Pennsylvania received $1,220, on average, from these tax breaks.

The Making Work Pay Credit, a refundable tax credit of up to $400 for individuals ($800 for married couples), was the most far-reaching of the tax breaks - reaching all but the very richest families.

How did working Pennsylvanians do by income group?

Read the Citizens For Tax Justice fact sheets for Pennsylvania and for the U.S. as a whole.

Don't Believe Everything You Read

Around this time each year, the Washington, D.C.-based Tax Foundation releases its "Tax Freedom Day." This is a favorite of advocates for cutting taxes and public services.

This year, the Foundation declared April 13 "Tax Freedom Day" in Pennsylvania. That's how long the group says it will take Pennsylvanians to pay their 2010 tax obligations at the federal, state and local levels.

Problem is, this report takes a one-size-fits-all approach to taxpayers - one that fits Bill Gates and Sam Walton a lot better than it most Americans.

By sizing its tax estimate to fit the wealthiest taxpayers, then spreading it out over the rest of us, the Tax Foundation provides a skewed look at how much we actually pay in taxes.

Read more about the problems with "Tax Freedom Day" in a commentary by Pennsylvania Budget and Policy Center Director Sharon Ward.

So Where Do Our Tax Dollars Go?

Here are two graphics showing you how tax dollars are spent in Pennsylvania and the U.S.

First, this graphic, from the nonpartisan Congressional Budget Office, details how federal tax dollars are spent on public services that we rely upon everyday.

This graphic, created by the Pennsylvania Budget and Policy Center using U.S. Census Bureau data, shows how state and local tax dollars are spent on similarly critical public services provided in our communities.