Pa. Gov. Wolf expects $3B a year by cutting sales tax exemptions

HARRISBURG, Pa. (AP) — Pennsylvania state government would reap $3 billion a year under Gov. Tom Wolf’s plan to expand a 6.6 percent sales tax to include transactions on 45 categories of products or services that are currently exempt, according to figures released by his administration today.

The new figures underscore how big a role the sales tax expansion would play in the Democratic governor’s plan to pump $3.2 billion a year into cutting school property taxes and providing $2 billion in new aid to pre-kindergarten programs and public schools over his four-year term.

The plan, Wolf contends, would help even the education playing field and bring relief to poorer and higher-tax school districts after schools saw deep cuts in state aid under his predecessor.

He also argues that eliminating the exemptions would bring Pennsylvania’s sales tax into the 21st century.

Removing the exemptions would be a bigger source of money than either Wolf’s proposal to raise the sales tax rate by 10 percent to 6.6 percent and the income tax by 20 percent to 3.7 percent. The tax revenue gained by removing the sales-tax exemptions would almost rival the amount of new revenue under Wolf’s plan to increase both the sales and income-tax rates.

The exemptions he would remove are similar, if not identical, to the ones that Republican lawmakers have sought in recent years as they tried to find ways to cut school property taxes.