By Anthony C. Infanti

With income inequality reaching alarming levels, is it really appropriate to impose an income tax on all Pennsylvanians at a single flat rate that asks the same sacrifice of everyone?

During the recent gubernatorial campaign, Gov.-elect Tom Wolf ran on a platform that answered this question with a resounding "no." I heartily agree and, given the attention that tax reform received during the campaign, presumably so do many of the other Pennsylvanians who were aware of his stance and voted for Wolf.

With the election behind us, our attention should now turn to the question of how best to achieve a fairer, progressive income tax that takes account of growing income inequality.

Wolf proposed coupling a "universal exemption" with an increased flat tax rate. The exemption would effectively expand the state's existing tax-forgiveness program, which is now targeted only at those living in poverty, to also provide tax relief to the middle class. When coupled with a higher tax rate, the universal exemption would also ask those with the highest incomes to chip in more toward the cost of funding our state government than they currently do.

The problem with this proposal is that outgoing Gov. Corbett was correct when he asserted during the campaign that it is unconstitutional. The Pennsylvania Constitution mandates, "All taxes shall be uniform, upon the same class of subjects." The state Supreme Court has interpreted this language to require "substantial equality of tax burden," unless a specific constitutional exemption applies (such as the one that permits tax relief targeted at those living in poverty). Because the Supreme Court views everyone receiving income as a single class of subjects, nothing less than a truly flat tax appears capable of passing constitutional muster.

For instance, in 1935, the Supreme Court struck down an income tax because it included an exemption amount (at the time, $1,000 for singles and $1,500 for married couples and heads of household) and graduated rates. Then in 1971, the Supreme Court struck down the predecessor of our current income tax, largely because it incorporated the federal personal exemption in the calculation of the tax base - even though it nominally imposed tax at a flat rate.

Unless the Supreme Court were to suddenly disavow these decisions, Wolf's proposed universal exemption with a higher flat rate would surely be found unconstitutional. Being universal, the exemption would not be targeted at those living in poverty. And it would have the effect of covertly creating graduated rates.

To see how this would happen, consider the effect of a $40,000 universal exemption and a flat rate of 5 percent on three taxpayers: one with $30,000 of income (who, if single and without children, would not qualify for the current tax forgiveness program); a second with $50,000 of income (slightly below median household income in Pennsylvania); and a third with $250,000 of income. Because Wolf has not proposed a specific exemption or tax rate, I have chosen these numbers to approximate his stated objectives of providing a break to middle-class taxpayers and a higher effective rate of tax on the wealthiest among us.

The taxpayer with $30,000 of income would pay no tax, saving the $921 in income tax that would currently be owed. The taxpayer with $50,000 of income would pay $500 in tax, for an effective rate of 1 percent or less than one-third of the current flat rate of 3.07 percent. The taxpayer with $250,000 of income would pay $10,500 in tax, for an effective rate of 4.2 percent or more than one-third more than the current flat rate. This is precisely the type of inequality of tax burden - graduated rates as income rises despite a nominally flat rate - that caused the Supreme Court to strike down the 1971 income tax.

But this is no reason to abandon the idea of moving to a progressive income tax.

A large universal exemption coupled with a flat rate is but a blunt means of achieving progressivity. If we instead free our income tax from the uniformity requirement (but retain it for property taxes, as other states do), we could develop a more nuanced graduated rate structure. This would allow us to take better account of rising income inequality - especially at the very top of the income scale - as some other states have done.

Campaigns are built on sound bites, but government should be built on discussion and deliberation. No longer needing to win the 24-hour news cycle, Wolf should capitalize on the momentum for tax reform that he built up during the campaign and lead us in a conversation about amending the Pennsylvania Constitution to exempt income taxes from an excessively rigid uniformity requirement that prevents us from joining the vast majority of states in adopting a progressive income tax.

Anthony C. Infanti is a professor of law at the University of Pittsburgh School of Law. infanti@pitt.edu