Lawmakers revise state sales tax plan

[BurgherHoldtheLies]

Looks like Pennsylvania is looking to tax food and clothing while eliminating the property tax. Personally, I am not in favor of this proposal but thought I'd see what other PA residents have to say about it.

From the Post Gazette

snip

Monday, February 07, 2005

By Tom Barnes, Pittsburgh Post-Gazette

HARRISBURG -- Would you be willing to pay a 5 percent state sales tax on a broader range of goods and services if it meant eliminating your school property taxes?

A group of conservative lawmakers called the Commonwealth Caucus is betting you would.

By taxing food, clothing and many services that are not now taxed but lowering the tax rate to 5 percent, supporters estimate that $16 billion to $17 billion statewide would be raised. This would be enough to replace the $7 billion currently raised by the 6 percent sales tax and provide another $9 billion to $10 billion to eliminate totally the school property taxes paid by homeowners and businesses, advocates contend.

Supporters such as Reps. Rod Wilt, R-Mercer, Sam Rohrer, R-Berks and Tom Yewcic, D-Cambria, claimed their tax plan would help businesses create new jobs by lightening their overall tax burden. It would also help senior citizens in particular by eliminating school property taxes, which are often a major burden for retired people on fixed incomes.

[vpigrad]

1. Once again....

the repukes are pushing a scheme to punish the poor. They got rich off of us, so why do they still hate us so much? It doesn't make sense.

[FormerDittoHead]

2. Billionaire's dream - totally regressive...

...perhaps this is why proposals in Harrisburg have been shot down which would freeze property tax on senior citizens - it would get in the way of the feudal system going into effect.

How nice - now they can wipe out public schooling in one shot!

Of course, no one figures that seniors will now have to pay tax on food and clothing, something which they don't do now.

[NickofTime]

3. Bad Idea

Lower tax rates always mean less money for schools.

[rkc3]

4. See link below:

http://www.psnw.com/~bashford/taxation.html

<snip>

Let's imagine two frugal traveling salesmen. They each have to buy a new car every four years to (say) keep up appearances, and they need reliable transportation.
(One guy makes 20K, the other 300K)
Run the numbers on a the RATE of total income each pays on on 5% sales tax.

Poor Boy buys a $20,000 car pays $1000 or 5.0% of his income.
Rich Boy buys a $60,000 car pays $3000 or 1.0% of his income.

Poor Boy has 5 times the tax bite, or rate of tax on a car. Rich Boy hardly feels sales taxes.

Then run the numbers on a $30 pair of Levis, and the tax rate discrepancy triples.
Sales tax is NOT a flat tax.

<snip>

Add in the fact that the rich guy gets a big tax break due to property tax elimination and the poor get even more soaked.

[BurgherHoldtheLies]

5. Any PA residents should call their reps in Harrisburg...

I know I will be calling in my complaints.

Not only does it hurt the public schools, but, by taxing food and clothing it hurts ANYONE with a family.

[IrishDemocrat]

6. Hopefully there are enough moderate GOPers in PA..

To shoot this down. I know right here in NE Philly there are 4 supposed moderate Republicans. They better vote this down. If not they get grilled!

[Patiod]

7. I'm surprised at clothes

It used to be a big tourist draw - Reading, King of Prussia

Maybe now that every podunk burg in america has an "outlet mall" it's not so true, but we did research a long time ago for some developers in Reading, and it turns out "shopping tourism" was a huge money-maker for Pennsylvania, driven by visits from states where clothing IS taxed.

And won't that just drive more clothing purchases to the internet?

[DebJ]

8. Don't tax WEALTH, tax INCOME, so people won't get any WEALTH

or be able to buy a home themselves in the future.

Sheesh.

[Patiod]

9. If they want wealth, they should get it the old-fashioned way

Inherit it.

[DebJ]

10. then use that to steal some more from the sweat of someone

elses labors.

[7 Lazy P]

11. Six of one and a half dozen of the other

Looks to me like they are simply replacing one funding source with another. How is taxing previously untaxed items, like food and clothing, any more regressive than a property tax?

[JPZenger]

12. Not Happening This Year

One conservative GOP State House member (Doug Reichley) said it best. To paraphrase him from memory, he generally said that the Legislature put great effort into the gambling bill and the related promises of tax relief, and that most members of the Legislature want to give it a chance to work. He said the majority is not interested in making a big shift in types of taxes this year.

I think this sales tax proposal is coming from a hard core group of conservatives who are hoping that the gambling act will be overturned by the State Supreme Court. They can then come in with this alternative to offer property tax relief.

However, this proposal would be actively proposed by every business that offers services that would be taxed - including lawyers, accountants, contractors, etc. That is a large number of influential people.

Taxing food purchased in a store is just wrong. I could understand taxing clothes over a certain price. I believe New York State does that. However, the stores then would break the same outfit up into different pieces with different price tags to get each item under the tax limit. (I can imagine stores selling each shoe separately.)

California a few years ago tried to tax junk food. But they had to come up with hundreds of pages of regulations to define what was junk food.

Property taxes should not be eliminated - they should be reduced. If someone owns a McMansion, they should pay tax on it.

[7 Lazy P]

13. Not this year is right

I doubt we'll see any tax relief from the slots this year or for several more years to come. They are too busy fighting in the statehouse to award licenses for slots to their favorite friends and cronies.

So far, Governor Rendell has failed to deliver on one of the central issues of his platform - property tax reform. I do not believe anyone has gotten any reform or relief to this point - only an increase in the state income tax! With both houses being controlled by the Republicans and the Governor's office controlled by the Democrats, not much gets passed one way or the other these days.....

[LynneSin]

14. I say tax everything that doesnt move on it's own....

Hell, I live in Delaware and we want your business Pennsylvania.

Everytime I head to the Brandywine Town Center or Concord Mall up on 202 North of Wilmington, the parking lot is jammed filled with cars that have PA License plates.

Hell even my liquor stores are filled cars with PA license plates (Favorite destination - Total Wine on Naemans Road just over the boarder it's about the size of a Kmart with much cheaper booze).

Gambling is suppose to help lower the property taxes some but unfortunately the fundies are blocking that path every step of the way. Not that we care in Delaware - our casinos are filled with Pennsylvania cars too! (BTW, seems our state is the destination for NJ to buy cigerettes too)

[JPZenger]

15. Good Point

You make an important point about the effects of taxes across state borders.

NJ has lower gas taxes - so there are more gas stations on the NJ side of the border. Delaware has no sales taxes - so there are tons of electronics and general merchandise stores on the Delaware side. However, there are many auto dealers on the PA side because PA makes a person pay the sales tax even if they buy a car in Delaware. There are many clothing and shoe stores on the PA side of the Delaware border, which would be hurt if they were suddenly taxed.

NY, NJ, Delaware and Maryland have progressive income taxes - unlike PA - so higher income people are moving into PA. NJ has higher real estate taxes, so people with want to build expensive houses on the PA side.