Published
August 26, 2026
Pennsylvania is again debating a “millionaires” tax, promoted by SEIU. Here are the familiar arguments: first, only the wealthy would pay. Second, the revenue is urgently needed. Third, businesses will not leave. And fourth, the tax would simply make the system equitable.
While these claims are compelling on the surface, they don't hold up under historical or economic context.
The SEIU argues that the tax would affect only a tiny fraction of Pennsylvanians. In practice, many of those labeled “millionaires” are small‑and medium‑sized business owners whose yearly income fluctuates and is often reinvested in their companies. These are the manufacturers, health care providers, contractors, and logistics firms that employ local Pennsylvanians. Treating them as a static revenue source ignores how closely their personal income is tied to payroll, expansion, and capital investment.
Another common claim is that higher taxes won’t drive people or capital away. Experience in competing states suggests otherwise. Tax policy is one of the clearest signals a state sends about its economic priorities. For a state struggling with population loss and workforce challenges, sending a message that success will be penalized is a risky strategy.
Unions also frame the debate as a matter of fairness. They argue that working families shoulder too much of the tax burden. Affordability matters, and if fewer businesses invest, expand, or relocate, the burden on working families doesn't shrink—it grows.
None of these proposals are new. The SEIU has repeatedly pushed versions of this tax, often during times of budgetary stress. Each time, leaders of both parties have recognized the same concern: once enacted, targeted taxes rarely stay that way. Revenue projections fall short, pressure builds, and the tax base expands.
Pennsylvania has faced similar moments before and chose not to abandon its flat income tax structure. The reason is simple: sustainable revenue comes from growth.
Shrinking the private sector through higher taxes may raise short‑term dollars, but it ultimately undermines the long‑term tax base that funds the public services Pennsylvanians rely on.
About the author
Michael Billet
Michael Billet, director of policy research for Employment Policy at the U.S. Chamber of Commerce, keeps members and internal Chamber policy staff abreast of pending labor, immigration, and health care legislation, as well as federal regulatory and subregulatory activities. He is also responsible for planning the Chamber’s annual workplace and community wellness forum.
