Pennsylvania provides a tax-friendly climate for retirees. Pennsylvania does not tax its residents’ retirement income. The State also has a serious issue with a large state employee pension.
Property Taxes and Cost of Living
The city property tax is not too high. As housing prices are comparatively lower, the city cannot collect high property taxes. Though Philadelphia earns a low amount of revenues from property taxes, homeowners still feel burdensome.
Municipalities have high property taxes to fund education, local services, etc. The taxes are going to prevent young people from wanting to buy a house.
Chester County residents paid $5,177 annually in property taxes, the highest tax levies in Pennsylvania. They are forced to increase taxes every year due to pension contributions and education mandates.
Statewide Taxation Concerns
Pennsylvania has the highest gas tax at 58.7 cents per gallon, and it also boasts the highest diesel fuel tax.
Pennsylvania made laws to collect more money through taxes on fields like sales tax, beverage tax, wage taxes which are noticeable. In Philadelphia, neighborhoods have gang violence and homeless issues, which create unsafe living conditions for people.
State Business Tax Climate
Is Pennsylvania a heavily taxed state? Pennsylvania has relatively high taxes, ranking 33rd on the State Business Tax Climate Index. The state sales tax rate is 6% plus up to 2% local tax. The state income tax rate is a flat 3.07%, which ranks 10th lowest nationally. However, few deductions are available, raising effective tax rates.
Encountering High Taxations
Property taxes are especially high in Pennsylvania compared to other states. Chester County has the highest property taxes in the state at over $5,000 per year on average. Taxes increase yearly due to pension contributions and education requirements.
The statewide taxes creating the most burden are:
- Property taxes to fund local services and education
- The 58.7 cent per gallon gasoline tax, the highest nationwide
- Sales taxes on items like beverages and wages
Pennsylvania’s property taxes are high compared to other states. Chester County has the highest property taxes at over $5,000 per year on average.
Overall, Pennsylvania has property tax rates exceeding the 1.07% national average. Rates range from 0.91% to 2.46% by county. The state doesn’t collect property taxes directly but counties, municipalities and school districts do. Chester County collects the highest at $4,192 yearly while Forest County collects the lowest at $860 per year.
Pennsylvania has a flat income tax rate of 3.07% which ranks 10th lowest nationally. The state sales tax is 6% plus up to 2% local. Combined with property and other taxes Pennsylvania ranks 33rd for business tax climate.
So while certain major taxes in Pennsylvania like the income tax and sales tax are reasonable compared to other states, issues like high property taxes and few deductions offset those benefits for residents. Funding pensions and local services also pressure jurisdictions to increase taxes regularly.