Below is a message that was sent to my local state representative, Dave Reed. The message was sent to make him aware of a piece of property tax legislation that is looking for sponsors and will be introduced into the House soon.
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I am writing to encourage you to support and even co-sponsor Rep. Sam Rohrer’s School Property Tax Elimination Act of 2007. This Act sounds like a promising way to eliminate the property tax system which is hurting Pennsylvanian’s.
Furthermore, I do not support HB1600, which sounds like Act 1 and simply shifts money around without providing any real relief to homeowners. Act 1 was rejected by the voters in May. We want something different to eliminate Property Taxes, while still maintaining adequate funding for our School Districts.
It is a challenge, but I think Rep. Rohrer’s bill is on the right track. Please monitor this closely for the taxpayers of your district.
Thank you
Showing posts with label Act 1. Show all posts
Showing posts with label Act 1. Show all posts
November 01, 2007
October 04, 2007
Eliminate Property Taxes?
Senator James Rhoades lays it on the line with the Property Tax Elimination Bill. He is requesting a referendum on the November 2008 ballot that would eliminate property taxes and increase the sales tax and personal income tax to offset about 96% of the $9 billion property taxes bring in.
You can read his press release at his web site.
His legislation will increase the sales tax from 6% to 9.19% and the personal income tax from 3.07% to 4.36%.
He says the funding to school districts would require the local school boards to REDUCE or eliminate school property taxes dollar for dollar.
Rhoades has some good ideas, but if property taxes are not eliminated, there is no reason for this legislation to go any further and waste the time of the legislatures. This is no different than the tax shifting schemes of the past.
You can read his press release at his web site.
His legislation will increase the sales tax from 6% to 9.19% and the personal income tax from 3.07% to 4.36%.
He says the funding to school districts would require the local school boards to REDUCE or eliminate school property taxes dollar for dollar.
Rhoades has some good ideas, but if property taxes are not eliminated, there is no reason for this legislation to go any further and waste the time of the legislatures. This is no different than the tax shifting schemes of the past.
May 18, 2007
The Spin is On!
Ok, no “fluffy” blog today, this one is down to business. As usual, Governor Rendell is spinning the latest defeat of Act 1 by the citizens of the great state of Pennsylvania.
Here is his quote on Wednesday (5/16/07):
“I am not surprised by the resounding defeat of the Act 1 tax shifting proposals. Unfortunately, in many cases, the full value of the property tax relief that the shift would have provided was not clear to the voters. I believe this contributed to the lackluster voter support.”
In other words, he blames the local school districts for not clearly explaining the meaning of Act 1 to their taxpayers. In reality, Act 1 provides only temporary relief (which was clearly explained to the voters), then everyone will be paying more in taxes. Most people would have been foolish to vote for this believing it will solve their high property taxes.
In fact, Governor Rendell didn’t even want the people to be able to vote on it (you can read his address to the Special Session in 2005). Apparently, he thinks the people of Pennsylvania are too dumb to understand anything and we should just do whatever he wants us to do!
Another quote, “Nevertheless, the local tax shifting proposal was an idea I accepted from the Republican leadership. They had hoped that this approach improved on Act 50 which they enacted under Governor Ridge. I expressed concerns throughout the process that voters would not embrace this sort of local tax shift.”
In other words, “It isn’t my fault, I didn’t come up with this. Those nasty Republicans did and they were simply trying to fix up something they screwed up under a previous (Republican) governor.” In reality, Governor Rendell called a special session of the legislature for property tax relief in September of the prior year (2005). According to many reports, much of Act 1 was wrote with “arm-twisting” and other political “activities” by the Governor’s supporters.
You can read the press release at the Governor’s Website.
Here is a quote from the 2006 ceremony when Gov. Rendell signed the bill into law.
“Today is a great day for Pennsylvania homeowners, especially seniors who have been driven from their homes as they attempt to escape the burden of skyrocketing property taxes for far too long.”
And another:
“This day is a major victory for Pennsylvanians who have fought for decades to have their property taxes cut. Every homeowner in Pennsylvania will not only get significant reduction, but they will finally get a say in future tax increases. This bill represents a victory of the possible over politics-as-usual.”
So to sum up:
In June 2006, it was a great day for Pennsylvania because of Gov. Rendell’s signature on Act 1.
In May 2007, it wasn’t surprising that Act 1 was defeated, because it isn’t as good as Gov. Rendell’s plan of gambling, raising taxes, and all of the other fees and borrowings in the Governor’s budget proposal.
I hope the voters of Pennsylvania really pay attention the next time they vote for a Governor.
May 16, 2007
The Voters Came Through!
Act 1 was rejected yesterday in EVERY school district in Indiana County! Most by a wide margin of 60% or more.
The people need to continue to push for a government that is in the best interest of all. Gov. Rendell and others need to know they work for us! We don’t want “smoke and mirrors”, we want real reform. Just because we are from rural Pennsylvania, doesn’t mean we are stupid and can be talked into anything.
It will be interesting to see how the Governor spins the widespread public rejection of Act 1.
Visit the Indiana County website for statistics on your township.
The people need to continue to push for a government that is in the best interest of all. Gov. Rendell and others need to know they work for us! We don’t want “smoke and mirrors”, we want real reform. Just because we are from rural Pennsylvania, doesn’t mean we are stupid and can be talked into anything.
It will be interesting to see how the Governor spins the widespread public rejection of Act 1.
Visit the Indiana County website for statistics on your township.
April 30, 2007
Three New Bills for Taxpayers of Pennsylvania
Three bills were recently introduced in the Pennsylvania House. If passed, these bills will actually help the taxpayers of Pennsylvania.
HB 1092 will reduce the state income tax back to the rate before Gov. Rendell raised it.
HB 188 will require voter approval for any increase in local school or municipal taxes.
HB 1100 will limit the spending increases of the PA government to the rate of inflation plus the population growth rate for PA.
These bills are a great start for taxpayer reform, however, more progress needs to be made. The size of Pennsylvania’s government is too big and should be reduced to make Pennsylvania more attractive to businesses and families.
I recently received my spring local per capita tax bill. I wasn’t surprised to see a change in the bill, I was surprised at the magnitude of the change! They dropped the millage portion of the tax and converted to a flat rate. This tax almost doubled without me even knowing about it and I pay attention to these things.
Pennsylvania needs real tax reform, not just tax shifts. Act 1 needs repealed, as it is a complete failure before it is even implemented. The 2007 Primary election will be held on May 15. There will be a question on the ballot regarding the implementation of an Earned Income Tax or a Personal Income Tax to reduce property taxes. I highly recommend voting “NO” for this tax shift. This is part of the Act 1 legislation. To read more about Act 1 click on the link labeled Act 1 on the right side of the screen.
HB 1092 will reduce the state income tax back to the rate before Gov. Rendell raised it.
HB 188 will require voter approval for any increase in local school or municipal taxes.
HB 1100 will limit the spending increases of the PA government to the rate of inflation plus the population growth rate for PA.
These bills are a great start for taxpayer reform, however, more progress needs to be made. The size of Pennsylvania’s government is too big and should be reduced to make Pennsylvania more attractive to businesses and families.
I recently received my spring local per capita tax bill. I wasn’t surprised to see a change in the bill, I was surprised at the magnitude of the change! They dropped the millage portion of the tax and converted to a flat rate. This tax almost doubled without me even knowing about it and I pay attention to these things.
Pennsylvania needs real tax reform, not just tax shifts. Act 1 needs repealed, as it is a complete failure before it is even implemented. The 2007 Primary election will be held on May 15. There will be a question on the ballot regarding the implementation of an Earned Income Tax or a Personal Income Tax to reduce property taxes. I highly recommend voting “NO” for this tax shift. This is part of the Act 1 legislation. To read more about Act 1 click on the link labeled Act 1 on the right side of the screen.
March 12, 2007
EIT and PIT and Act 1
The question has been asked several times, "What is the difference between EIT and PIT." EIT is short for Earned Income Tax. PIT is short for Personal Income Tax.
With EIT you are taxed on items such as: salaries, wages, commissions, bonuses, stock options, incentive payments, fees, tips, and net profits from a business. Basically, you are taxed on any money you earn.
The PIT taxes everything included in EIT, but also includes items such as: interest, dividends, capital gains, rents, gambling, and lottery winnings. In other words, it includes all of your earned income plus any income you received, but didn’t work for.
Neither EIT nor PIT taxes Social Security payments or retirement pension payments.
At least one local school district is considering the PIT. Homer-Center school district is proposing a personal income tax rate of 1.3%. The real estate tax reduction will be between $202 and $225. This will replace their current EIT.
Using the spreadsheet I created for the Act 1 Analysis, we can’t really determine what is best for you because they currently have an earned income tax. However, I will say most older people that have “unearned” income will pay more in the way of taxes. The only people that will be better off are those that don’t make much money and don’t own a “valuable” house or property.
With a PIT usually investors/savers are penalized the most. Therefore, you can guess why I am against a PIT. Why tax the people that have spent years investing their money for a secure future rather than blowing it on frivolous things of everyday life.
In my opinion, the only way ANY of these taxes will be approved is if the voters don’t truly understand what they are voting for! But don’t rely on what I say; run the numbers yourself, it’s easy.
Please, pass this blog link on to your friends and family living in Pennsylvania.
With EIT you are taxed on items such as: salaries, wages, commissions, bonuses, stock options, incentive payments, fees, tips, and net profits from a business. Basically, you are taxed on any money you earn.
The PIT taxes everything included in EIT, but also includes items such as: interest, dividends, capital gains, rents, gambling, and lottery winnings. In other words, it includes all of your earned income plus any income you received, but didn’t work for.
Neither EIT nor PIT taxes Social Security payments or retirement pension payments.
At least one local school district is considering the PIT. Homer-Center school district is proposing a personal income tax rate of 1.3%. The real estate tax reduction will be between $202 and $225. This will replace their current EIT.
Using the spreadsheet I created for the Act 1 Analysis, we can’t really determine what is best for you because they currently have an earned income tax. However, I will say most older people that have “unearned” income will pay more in the way of taxes. The only people that will be better off are those that don’t make much money and don’t own a “valuable” house or property.
With a PIT usually investors/savers are penalized the most. Therefore, you can guess why I am against a PIT. Why tax the people that have spent years investing their money for a secure future rather than blowing it on frivolous things of everyday life.
In my opinion, the only way ANY of these taxes will be approved is if the voters don’t truly understand what they are voting for! But don’t rely on what I say; run the numbers yourself, it’s easy.
Please, pass this blog link on to your friends and family living in Pennsylvania.
March 02, 2007
Act 1 of Pennsylvania – Property Tax Relief
Today’s post is regarding Act 1 of Pennsylvania, which is supposed to bring the taxpayers of Pennsylvania some property tax relief by shifting the taxes to an Earned Income Tax or a Personal Income Tax structure depending upon what the voters of the district decide in May of 2007.
Many people have asked me to make a recommendation if they should vote for this tax shift in May. I have created a spreadsheet for you to enter the numbers to calculate for yourself if the tax shift is in your best interest. The spreadsheet is located at Google Docs and Spreadsheets
Act 1 Analysis
To use the spreadsheet simply enter the new additional Earning Income or Personal Income tax, the estimated reduction in property taxes, and your salary. It will automatically calculate what you will save or (mostly pay) in taxes. It will also calculate a breakeven point which shows who benefits and who pays more in taxes.
If you cannot get the spreadsheet to work, don’t worry. It is easy to calculate your own analysis.
Take your salary and multiply it by the proposed additional tax rate then subtract the expected property tax reduction. This will be the amount of taxes you will pay.
The example below uses data for the Blacklick Valley School District, which was recently published in the Nanty Glo Journal Newspaper.
The proposed additional earned income tax rate is 0.2%.
The expected property tax reduction is $44.
I will assume a salary of $50,000 and $25,000.
$50,000 * 0.2% - $44 = $56
$25,000 * 0.2% - $44 = $6
What does this mean?
The person earning $50,000 will see their property taxes reduced by $44. Their income tax will increase by $100. Their net effect will be a $56 increase in taxes.
The person earning $25,000 will also see their property taxes reduced by $44. Their income tax will increase by $50. Their net effect will be a $6 increase in taxes.
Renters will not win, since they do not pay property taxes. They will simply pay more in Earned or Personal Income Taxes.
As more school districts release their ballot questions I may update the analysis for those schools or you can calculate the results and post them as a comment to this blog.
REMEMBER! This is a temporary “fix.” If an earned income or personal income tax is approved this year, that tax will not go away. It will still be there next year when your property taxes are raised again!
There is much more to Act 1 than what is mentioned here. That being said….
In my opinion, most people should probably not vote to raise the earned income tax or create a personal income tax. Even if you think you will benefit from it, it will most likely only be a temporary “benefit” to you.
Comments anyone? I am especially interested in hearing from people that fully support the tax shift!
UPDATE! Here is a link to a spreadsheet on PDE's web site regarding what your school district might be doing for Act 1.
Many people have asked me to make a recommendation if they should vote for this tax shift in May. I have created a spreadsheet for you to enter the numbers to calculate for yourself if the tax shift is in your best interest. The spreadsheet is located at Google Docs and Spreadsheets
Act 1 Analysis
To use the spreadsheet simply enter the new additional Earning Income or Personal Income tax, the estimated reduction in property taxes, and your salary. It will automatically calculate what you will save or (mostly pay) in taxes. It will also calculate a breakeven point which shows who benefits and who pays more in taxes.
If you cannot get the spreadsheet to work, don’t worry. It is easy to calculate your own analysis.
Take your salary and multiply it by the proposed additional tax rate then subtract the expected property tax reduction. This will be the amount of taxes you will pay.
The example below uses data for the Blacklick Valley School District, which was recently published in the Nanty Glo Journal Newspaper.
The proposed additional earned income tax rate is 0.2%.
The expected property tax reduction is $44.
I will assume a salary of $50,000 and $25,000.
$50,000 * 0.2% - $44 = $56
$25,000 * 0.2% - $44 = $6
What does this mean?
The person earning $50,000 will see their property taxes reduced by $44. Their income tax will increase by $100. Their net effect will be a $56 increase in taxes.
The person earning $25,000 will also see their property taxes reduced by $44. Their income tax will increase by $50. Their net effect will be a $6 increase in taxes.
Renters will not win, since they do not pay property taxes. They will simply pay more in Earned or Personal Income Taxes.
As more school districts release their ballot questions I may update the analysis for those schools or you can calculate the results and post them as a comment to this blog.
REMEMBER! This is a temporary “fix.” If an earned income or personal income tax is approved this year, that tax will not go away. It will still be there next year when your property taxes are raised again!
There is much more to Act 1 than what is mentioned here. That being said….
In my opinion, most people should probably not vote to raise the earned income tax or create a personal income tax. Even if you think you will benefit from it, it will most likely only be a temporary “benefit” to you.
Comments anyone? I am especially interested in hearing from people that fully support the tax shift!
UPDATE! Here is a link to a spreadsheet on PDE's web site regarding what your school district might be doing for Act 1.
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