Thursday, October 11, 2007

PA Tax elimination plans: not real

Beware. Most of the property tax elimination plans making the rounds in Harrisburg aren't real. Reason: the PA Constitution contains a clause which disallows abolishing the property tax. In order for any property tax elimination plan to be adopted, the PA Constitution would first have to be altered by means of an amendment and the clause would have to be removed.

Notice in the following plan, property taxes are not totally eliminated! County and municipality property taxes would remain.

The state legislators will never pass a bill that totally eliminates all local property taxes. they talk a good game, but none can or will deliver.

(Net the Truth Online)

Pa. tax plan shifts burden to consumers, wage earners
Thursday, September 27, 2007
By Tom Barnes, Post-Gazette Harrisburg Bureau
HARRISBURG -- A state senator from Eastern Pennsylvania has come up with a startling proposal on tax shifting, one that would virtually eliminate school property taxes in many districts by significantly raising the sales tax and personal income tax rates.

Under the plan of Sen. James J. Rhoades, R-Schuylkill, Pennsylvania would have the highest sales tax rate in the nation by far -- 9.19 percent in 55 counties and 10.19 in two of them, Allegheny and Philadelphia. The state sales tax is 6 percent now in most Pennsylvania counties, but it's 7 percent in the two largest counties.

Nationwide, California has a 7.25 percent sales tax and four states, New Jersey, Mississippi, Rhode Island and Tennessee, have a 7 percent rate.

Under the Rhoades plan, the personal income tax rate also would jump significantly, to 4.36 percent from the current 3.07 percent.

Mr. Rhoades, chairman of the Senate Education Committee, wants the proposal to go before voters in a referendum in November 2008.

Raising those two taxes would generate $9 billion in additional revenue, Mr. Rhoades told a news conference yesterday. That would permit the elimination of school property taxes for both homeowners and businesses in 305 school districts. In the other 196 districts, property taxes would be cut by an average of 96 percent, he said.

But he said none of these moves would happen without approval from Pennsylvania voters. He wants the Legislature to put the question of this major tax-shifting proposal on the statewide ballot in November 2008. But he said he wants to get the discussion started now.

The referendum results would be binding on the Legislature. If voters gave the go-ahead for the tax shift, the Legislature would have to enact it in 2009, he said. If it's defeated, the state's tax structure would stay as it is.

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