Would you be willing to pay more sales and income taxes if it meant your property tax would disappear?
That is the plan Pa. Rep. Jim Cox's unveiled Monday during a news conference in Harrisburg.
"This is not a Republican idea. This is not a Democrat idea. This is an idea for Pennsylvanians," said Cox, R-Berks Co.
It's called the Property Tax Independence Act. The bill would eliminate school property taxes for both homeowners and businesses, and it's already garnered bipartisan support.
"Young families that are starting out, that property tax is a killer," said Pa. Rep. Tom Caltagirone, D-Berks Co.
"It is the worst funding stream for public education," said Pa. Rep. Mark Gillen, R-Berks Co.
House Bill 1776 would provide the same level of funding for schools across the Commonwealth, but the funds would be replaced with new state revenues. Under the bill, the state's personal income tax would increase from 3.07% to 4%, and the state sales tax would jump from 6% to 7%.
Supporters of the bill said every dollar of school property taxes homeowners do not have to pay for can be reinvested in the state's economy, which in turn could mean more jobs.
"If you can imagine, all the businesses are going to get a pass on this and they could reinvest, upgrade, hire more employees and expand their facilities," said Caltagirone.
The bill is in its early stages, but some political pundits are already picking it apart. Dr. G. Terry Madonna agreed Pennsylvania would be better off getting rid of the property tax, but he said the bill is not perfect.
"The problem is, it's been around for centuries, and it provides for school districts a huge sum of the money they need to function," said Madonna.
The plan would apply the 7% sales tax to clothing and footwear that cost more than $50. It would also expand the number of items taxed by closing loopholes to include non-prescription drugs and food items that are not part of the Women, Infants, and Children (WIC) program.
"There are certain items that are tax exempt that lots of folks won't support removing," said Madonna.
To put it in perspective, Cox said a homeowner paying $5,000 in property taxes would have to spend more than $70,000 on newly taxed items to see any increase.
"When we move away from a school property tax, we broaden the base of taxpayers," said Cox. "The broader the tax base, the more fair it is, and the more stable it is."
The bill has also been endorsed by the independent Pennsylvania Coalition of Taxpayer Associations (PCTA).
To learn more about this bill, and to see a complete list of items that would be subject to the expanded sales tax, visit Cox's website.
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