More Taxation news More news in Pennsylvania Find Taxation lawyers in Pennsylvania
On December 4, 2025, Pennsylvania Governor John Smith announced a new tax plan that aims to increase state revenue while providing much-needed relief to middle-income families. The plan, which was approved by the state legislature earlier in the week, includes a combination of tax cuts for working families and targeted increases on high-income earners and corporations.One of the key components of the new tax plan is a reduction in the state income tax rate for individuals earning less than $75,000 per year. Under the plan, these individuals will see a 2% decrease in their tax rate, which will provide a significant savings for millions of middle-class Pennsylvanians. In addition, the plan includes an increase in the state Earned Income Tax Credit (EITC) for low-income workers, providing further relief to those struggling to make ends meet.To help offset the revenue lost from the tax cuts for working families, the plan includes a slight increase in the state income tax rate for individuals earning over $200,000 per year. This tax hike is projected to generate an additional $100 million in annual revenue, which will be used to fund essential state services and programs.In addition to changes in the individual income tax rates, the new plan also includes a corporate tax reform package aimed at ensuring that large corporations pay their fair share. Under the plan, corporations with annual revenues over $1 billion will see an increase in their state tax rate, while small businesses will benefit from a reduction in their tax burden. These changes are expected to generate an additional $50 million in annual revenue for the state.Governor Smith hailed the new tax plan as a balanced approach to taxation that will help strengthen the state economy and provide much-needed relief to Pennsylvania families. "This plan is about fairness and equity in our tax system," Smith said. "It ensures that those who can afford to pay a little more will do so, while providing meaningful tax relief to working families who need it most."The new tax plan is set to go into effect on January 1, 2026, and state officials are already working to implement the necessary changes to the tax code. With these new measures in place, Pennsylvania is poised to see both an increase in state revenue and provide much-needed relief to middle-income families across the state.