Wolf budget proposal

[JPZenger]

http://www.pennlive.com/politics/index.ssf/2015/03/winners_and_losers_in_gov_tom.html#incart_big-photo

Wolf's budget proposes an emphasis on increased education funding and reduced property taxes. It would be funded by closing corporate tax loopholes (while lowering the overall rate), increasing statewide income taxes and increasing statewide sales taxes.

Republican leaders have said they won't discuss any increased taxes until long-term pension costs are reduced. One legislator said otherwise it would be like turning up the heat when there is a giant hole in the roof letting all of the heat escape.

Unlike most of our neighboring states, PA. is not allowed to enact a progressive state income tax. There was an attempt to do it in the 1970s, which was overturned in the courts because of language in the State Constitution. However, it is believed that the state can increase the overall rate, and then increase the number of deductions, credits and/or property tax rebates so that lower income persons end up paying less.

http://www.pennlive.com/midstate/index.ssf/2015/03/pennsylvania_income_sales_taxe.html#incart_big-photo

Excerpt:

In the aggregate Pennsylvanians will be paying more given the double-whammy of sales and income tax increases. Revenues to Harrisburg are expected to grow by a net $2.4 billion in 2015-16, after $2.1 billion is swept off and locked away for the 2016 property tax cuts.

Wolf's plan will likely work out best for homeowners with relatively modest incomes, and low- and moderate-income seniors in their own homes. Wolf says some 270,000 senior citizen households will have their school property taxes eliminated by his plan.

But as your household income rises - especially for those above $100,000 - and you are a heavier player in the retail economy, the balance tilts more heavily in favor of the state.

[JPZenger]

1. Items proposed to be subject to sales tax

http://www.mcall.com/news/breaking/mc-wolf-sales-tax-proposal-pa-affected-items-services-20150303-story.html

I can't see this happening. Gov. Wolf wants to make all professional services subject to the 6.6% sales tax. There is a list at the link.

This list includes "higher education." However, another source says college tuition payments would remain exempt from the tax.

There was a Dem Governor Florio in NJ a number of years ago who wanted to broaden the items subject to sales tax. The slogan became "He even wants to tax your toilet paper!"

[femmocrat]

2. A tax on horses???

Really?!

You are right. All the special interests will fight this. A tax on dental services? No way.

[PRETZEL]

4. When the dust settles and the negotiations start

alot of the personal services will be taken off. I'm guessing Gov. Wolf made this an all inclusive so that when some are cut, there will be talking points.

I know I can live with the income tax increase. I took a quick look and for me its only a couple of bucks a week. It'll be the sales tax that will be the issue for me as well as for many of us.

Overall, working in the human services sector I was pretty happy with the commitment Gov. Wolf made to those who need services but either can't afford them on their own or programs being inadequately funded to meet the needs.

[rock]

3. "... it would be like turning up the heat ..."

"Instead leave the giant hole in the roof and don't turn up the heat. Think of the money we'll save!"

[Number9Dream]

5. Will have to reserve judgment until I see some property tax relief

First, what is Gov. Wolf's definition of "relatively modest incomes"? Our total property taxes are now over $5000, and climb every year. We applied for the Homestead relief a long time ago and never saved a penny. We're ready to move out of PA when I retire.

When Rendell was running in 2002, he said that property tax relief would be his "number one priority". We got two half-assed Acts which resulted in no relief at all.

[JPZenger]

6. Way too ambitious a plan

His plan is way too ambitious, which means it will cause many groups to organize against it, beyond the typical conservatives. The people who will benefit most won't understand it, or won't trust that their real estate taxes really will go down.

[Number9Dream]

7. Hard to trust without specifics

Thanks for the info, JPZ.

Property owners won't trust that their property taxes really will go down without some real numbers. I tried Googling, to no avail. "Relatively modest incomes" is very vague. The info is much more specific on the tax increases, and vague on decreases.

I wish Gov. Wolf would push to legalize and tax marijuana. PA would make millions.

[JPZenger]

8. More info on the revenue proposals

http://www.mcall.com/news/nationworld/pennsylvania/mc-pa-sidebar-taxes-tom-wolf-budget-20150303-story.html

Wolf is just asking for too much at one time.

[meow2u3]

10. Agreed

Gov. Wolf wants too much too soon. Tax increases need to be phased in, but no new taxes on items not taxed now.

[meow2u3]

9. New taxes on e-cigs pisses me off

Vapers should be rewarded for quitting smoking, not punished for quitting smoking in a way the tobacco control industry disapproves of.

I switched to e-cigs partly so I didn't have to cough up a fortune in cigs along with my lung. Now I feel punished for not quitting "the right way."

I wished Democrats would leave vapers alone and not threaten us with sin taxes on something that isn't even a sin.

[JPZenger]

11. More analysis of budget proposal

http://www.newsworks.org/index.php/homepage-feature/item/79156-dissecting-wolfs-33-billion-plan-for-pennsylvania?linktype=hp_impact

What do you think is the likelihood that the newspapers in PA. will favor a plan that adds a new 6.6% tax on newspapers?

Do you think the lawyers in PA. might have something to say about the proposed new 6.6% tax on legal services (and other professional services)?

[JPZenger]

12. Too many people will oppose the plan

Wolf's plans are too complex and affect too many people. It might be possible to get public support for a slightly higher income tax, if everyone felt it would close a gap in college and school funding, and if it was offset by a higher deduction for low income persons. Most of the public supports a 5% gas severance tax.

However, it is way too much to ask to throw on top of this a sales tax increase and a big expansion in the goods and services subject to the sales tax. You can't try to raise $4 billion or more in new tax revenue in one year. You become a charactiture of the tax and spend Democrat.

It is not that hard politically to support a cigarette tax increase because the people who smoke the most typically don't vote. Also, if you need to tax something, it is best to tax something that kills people. However, Philadelphia's and New York's cig taxes are already so high that people go across borders to buy them.

There was a group of conservatives who were pushing for years for this same type of sales tax plan that Wolf is now proposing. Both those conservatives and Wolf were trying to use sales taxes and taxes on services to reduce property taxes. However, those same legislators will not vote for anything that Wolf proposals.

Also, sales taxes are regressive - they hit low income households harder. Now, the plan would also hit students buying textbooks, people buying caskets, and other essentials.

Property tax reform should wait for later. Right now, we need to fix the education funding issue, address the pension obligations and fill in the $2 billion operating deficit.

Also, Wolf wants to end PA's position as the only state that does not tax chewing tobacco and cigars. There is a public campaign warning of all of the jobs that will be supposedly lost if Pa. has the same taxes as neighboring states.