STATE BUDGET DEAL STALLS
The new proposed budget deal now appears to be stalled. Concern is being raised by Democrats that the 7.25% sales tax is regressive and will hurt low income residents. The tax would apply to the same items as are currently taxed. If the new tax rate is passed it will be the 2nd highest in the USA...only California would be higher.
Taxes are never a static amount; for every state action, there is a taxpayer re-action. Brick-and-morter stores would be at a distinct disadvantage to online and out-of-state merchants. There is no way to judge how much that could impact sales and tax revenues. There is also the risk of local business closings, which seem to be at a high level now, would increase. We have seen the closing of several long-term local businesses and also see quite a few vacant retail spaces. Most of the rent on these spaces is quite high due to the high property taxes on commercial spaces.
As for the promised property tax relief, it is estimated from a low of $50.00 to a high of $550.00. Northwestern Lehigh would most likely be nearer to the $50.00. All this is really insignificant and would be wiped out with the first tax increase. Many legislators say they will not vote for this without a law that requires a referendum to raise school taxes. I doubt that this governor would sign this either. This is just a distraction from real tax reform, any bill that raises one tax to lower another is just shuffling things a little, and then both taxes will be raised.
Also coming up for a vote is SB 76. This is a plan to eliminate the property tax completely, replacing it with a sales tax increase and a income tax increase. Why didn't the Republicans pass this when they had a republican governor?. They may pass it now and let Wolf veto it.
Property taxes should be eliminated, as this is an antiquated, discriminating tax. Why should only property owners pay for this service? It has also infringed upon the principle of private property. In effect, we never really own the property, but lease it from the school district. While I do believe the deathknell is nearing for property tax, it is not now.
It appears that we are now back to a continuing resolution to come sometime before Christmas.
Taxes are never a static amount; for every state action, there is a taxpayer re-action. Brick-and-morter stores would be at a distinct disadvantage to online and out-of-state merchants. There is no way to judge how much that could impact sales and tax revenues. There is also the risk of local business closings, which seem to be at a high level now, would increase. We have seen the closing of several long-term local businesses and also see quite a few vacant retail spaces. Most of the rent on these spaces is quite high due to the high property taxes on commercial spaces.
As for the promised property tax relief, it is estimated from a low of $50.00 to a high of $550.00. Northwestern Lehigh would most likely be nearer to the $50.00. All this is really insignificant and would be wiped out with the first tax increase. Many legislators say they will not vote for this without a law that requires a referendum to raise school taxes. I doubt that this governor would sign this either. This is just a distraction from real tax reform, any bill that raises one tax to lower another is just shuffling things a little, and then both taxes will be raised.
Also coming up for a vote is SB 76. This is a plan to eliminate the property tax completely, replacing it with a sales tax increase and a income tax increase. Why didn't the Republicans pass this when they had a republican governor?. They may pass it now and let Wolf veto it.
Property taxes should be eliminated, as this is an antiquated, discriminating tax. Why should only property owners pay for this service? It has also infringed upon the principle of private property. In effect, we never really own the property, but lease it from the school district. While I do believe the deathknell is nearing for property tax, it is not now.
It appears that we are now back to a continuing resolution to come sometime before Christmas.
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