The state has one of the worst taxing setups in the nation because low-income workers spend nearly three times as much on state and local taxes as high-income workers – 12.3 cents on every dollar earned by the poor compared to 4.3 cents for the wealthy.

And too much of the taxing and spending is pushed down to the local level, with too much reliance on property taxes to fund local schools.

That, said Sharon Ward, is a recipe for trouble because it results in disparities between the haves and the have nots.

Ward is director of Pennsylvania Budget and Policy Center, a nonpartisan research center in Harrisburg, which studied the tax system and compared it with other states.

It found that a single parent of three children, making $60,000 a year, pays a greater portion of earnings in taxes than a childless single person earning the same, Ward said.

The center’s report recommends that Pennsylvania:

•Adopt a graduated income tax.

•Begin taxing items and services now exempt from the sales tax.

“We’re relying more on local spending than other states, and that fuels some of the concerns about property taxes and tax fairness,” Ward said.

“If we were more balanced in terms of our personal income taxes with our local taxes, that would reduce pressure on local governments and local taxpayers,” she added.

State Rep. Samuel E. Rohrer, a Robeson Township Republican who has proposed abolishing the school property tax and replacing it with an expanded sales tax as the sole funding source for education, agrees that the current taxes are regressive.

Rohrer insists that broadening the sales tax alone would raise enough money to fund education and make taxes fairer.

Low-income families buy mostly necessary goods, so their taxes would remain the same, Rohrer said.

Wealthier families tend to buy larger amounts and more expensive services and luxury items, so their taxes would rise, he said.

Income taxes collected vary too much over time and are unpredictable, while sales taxes rise at a steady, predictable rate, Rohrer said.

“That’s why I came to the conclusion that sales tax is the most preferred method,” he said. “It’s good financially, and it’s reflective of what’s actually happening in the economy.

“It smooths out the differential between the poor and the rich.”

State Sen. Michael A. O’Pake, a Reading Democrat who recently reintroduced his proposal for a graduated income tax, said expanding the sales tax alone would make the taxing system even more unfair and more regressive.

And the center’s report clearly makes that point, he said.

Under O’Pake’s plan, the personal income tax would rise 0.5 percent for every $50,000 of annual income over $100,000 to a maximum of 6.57 percent.

Pennsylvania’s income tax is one of the lowest of the 41 that tax incomes, and one of seven that don’t use a graduated tax, O’Pake said.

“The bottom line is that Pennsylvania’s tax structure is unfair to the middle class and senior citizens, and those who can least afford rising property taxes,” he said. “My proposal is democratic. It’s based on the ability to pay.

“What could be more fair than that?”

Ward said the growth in sales tax revenues don’t keep pace with the cost of education.

“That’s just not going to cut it,” she said. “At the end of the day, not having a graduated income tax hurts Pennsylvania taxpayers.”

Regardless of which plan legislators favor, Ward hopes the report will give them the facts they need to argue for a fairer system.

“We need to address the tax fairness issue,” she said. “There are ways to get a fairer balance in state and local taxes that would take some pressure off local taxpayers.”