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Relief prospects

November 29, 2013

For more than 30 years, our state legislators have tried and failed to give real property tax reform to homeowner....

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(34)

CarlHiller

Nov-29-13 5:57 AM

"Senate Bill 76 eliminates property taxes and replaces the funding with personal income and sales taxes while broadening the tax base." Neither HB76 or SB76 eliminate property taxes, while they temporarily may suspend the "school" portion of the property tax, neither bill "eliminates any property taxes". This is a a sham and a lie. These bills prevent school districts from levying (school) property taxes after 2013, unless, the tax is necessary to pay for debt service already on the books creating the opportunity for the state and the school districts to not only increase income and sales taxes but also keeps the door open for the reinstatement of school property taxes. There are no bills in either the House or the Senate that address real property tax elimination in Pennsylvania, they all leave open a door to not only increase sales and income tax but allow reinstatement of property taxes. School property taxes are only 1/3 the issue of the property t

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ToTEXASfromPA

Nov-29-13 6:27 AM

From the PAR (Pennsylvania Association of Realtor) website.

".....SB 76 and HB 76 propose to eliminate property taxes dedicated to school districts and replace the funding by raising the personal income tax from 3.07 percent to 4.34 percent and increasing and broadening the sales tax from 6 to 7 percent to include previously untaxed items. .....the bill is nearly revenue neutral.....PAR believes that this reform is important to maintain the real estate industry recovery in the Commonwealth."

Income tax would go up 1.27% and sales tax by 1%. In addition, previous necessities like food and clothing will now have sales tax.

PAR is pushing it so there are more house sales and commissions for their pocket.

Then also the question is who's school district will get the tax revenues for educating their children? How will the tax revenues be apportioned? More overhead created in the system to manage it since the property taxing agency doesn't disappear.

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Capricorn1

Nov-29-13 6:43 AM

This is a a sham and a lie. These bills prevent school districts from levying (school) property taxes after 2013, unless, the tax is necessary to pay for debt service already on the books creating the opportunity for the state and the school districts to not only increase income and sales taxes but also keeps the door open for the reinstatement of school property taxes. -Carl

Carl, where did you get this information? The way I read the bill, the first year the school taxes would be frozen at their current rate and after that they would only impose enough to pay off any past debt. Once the debt is paid off, school property tax is eliminated completely. Personally I think this is a better approach than the current system. As it stands, many young couples are unable to purchase homes because of the added expense of these taxes. I saw it first hand when I recently sold a home.

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eriklatranyi

Nov-29-13 6:48 AM

Capricorn:

But, what if more debit is incurred by the school district?

Does that lead to a continued property tax?

The wording is not clear on this.

And unless there is clarity about ending property taxes, we all know that we will end up with both higher income & sales taxes AND property taxes.

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Capricorn1

Nov-29-13 7:23 AM

Erik, if you Google the Bill you will find several sites that explain how it will work and the way I'm understanding it, is once PAST debts are eliminated, the tax is eliminated completely. And for every dollar that is eliminated under property taxes, it is replaced dollar for dollar with monies from this new program. It is increased annually at the rate of inflation. This will allow everyone to contribute through the increased sales tax. Personally, I would like to see federal income tax eliminated completely and institute a federal sales tax.

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CarlHiller

Nov-29-13 7:38 AM

Hi Cap - It is in the bills posted at legis .state .pa .us Section 1102. Transitional taxes. While it may phase them out over a time there is nothing that prohibits the districts from refinancing the same debt over and over and retaining it on the books as an original debt. Without an amendment to the PA Constitution there is nothing to forbid a future legislature from re-instituting a school property tax. Remember one thing when you read any legislation, most bills are written by lawyers or lobbyists and every word and every punctuation means something, plus you have to read any of the laws they reference to get to the meaning of the law.

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CarlHiller

Nov-29-13 7:44 AM

Cap - "the way I'm understanding it, is once PAST debts are eliminated, the tax is eliminated completely." Without an amendment to the PA Constitution it will never be eliminated. There is always the possibility and the probability that a future Legislature will re-instate it.

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eriklatranyi

Nov-29-13 7:45 AM

Capricorn:

I am completely in favor of eliminating the property tax, but this creates loopholes, just like every other bill out there.

I am tired of these shenanigans from elected officials.

Why should a district, that has past debt, be able to raise property taxes at all?

It should just do away with property taxes and, if it is revenue neutral, then those districts should pay back the money from the new revenue stream.

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Capricorn1

Nov-29-13 7:46 AM

Carl, I'm definitely not an expert when it comes to reading legislation and understanding all the legal aspects. I guess I am just hoping that this is the first step in eliminating these nuisance property taxes. I also think more needs to be done to reduce administrative costs in the school budgets. They are eating up a good portion of the budget.

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CarlHiller

Nov-29-13 7:58 AM

Cap, I believe a Constitutional amendment would be the more prudent first step, with a law in the works to fund those that depend on the property taxes for their funding. Without that any law would simply be the stepping stone to higher taxes along with the property tax.

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DavidBross

Nov-29-13 8:14 AM

I think supporting a switch from property taxes to sales and income taxes is a good idea. They focus on liquid assets. Of course it depends on what is included / excluded. For example, would the sales tax apply to the purchase price of real estate?

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mikekerstetter

Nov-29-13 9:26 AM

A lot of those opposed to property tax reform don't own property. No matter how it's sliced, taxing someone on the perceived value of something they own is an unfair levy of taxes.

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enigma

Nov-29-13 9:38 AM

Let me start by saying that I am opposed to the very idea of property tax. A tax on what is owned, negates the very premise of private ownership. But I also oppose property tax reform that just shifts the burden to another source. The bigger problem that isn't being addressed is spending reform. Hiding the taxes in payroll withholding actually makes it easier for politicians to spend more and that is exactly what they will do. And after they have lowered your property taxes with this so-called reform, they will steadily increase again until it is just as if no reform was taken. I've seen it happen. Without spending reform, tax reform means nothing.

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enigma

Nov-29-13 10:00 AM

David asks a good question. What would be subject to sales tax and what would not? Our sales tax laws are almost as bad as our income tax laws. For a law to be fair, it must apply equally to everyone and everything. If you are going to have a sales tax, it should be universal. It must apply to the sale of real estate (this writer would hate that), and even rent. If you are going to tax commerce, you must tax all commerce. An income tax, should be just an extension of the sales tax. You are in essence selling your services to your employer, so your pay, if taxed at all should be taxed at the sales tax rate. A tax on commerce and not property is the only tax that should be allowed if we intend to call ourselves a free people, because in order to be free, you must be able to own property and if the government can tax it, you don't really own it.

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Fredzz

Nov-29-13 10:36 AM

This is a shortened version of an old story that will increase one's ability to decipher Legal Speech.

The power of the Comma...!

A businessman went to an very important out of State meeting.

His wife was very ill and home bound.

They agreed that if she needed him she was to send a telegram and he would return home.

Later she sent a telegram... ( Not getting any better, come home soon. )

When the telegram was sent the comma was in the wrong position.

( Not getting any, better come home soon. )

Same words..... major difference in meaning.

When reading "" Legal Speech "". Move that comma around and see just how many ways both simple & complex speech can be interrupted

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Shulski

Nov-29-13 10:52 AM

The West Branch Valley Association of REALTORS and the Pennsylvania Association of Realtors (PAR) support Senate Bill 76 because it offers real reform"

Realtors support it because it'll make them more money from less taxes on all the properties they own,. Of course, people who own only one home or rent will support then reform just because it sounds like less taxes. Sadly, it'll probably raise income and sales taxes. More cops, prisons and wars will be ordered by local politics thus raising all taxes

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mikekerstetter

Nov-29-13 11:18 AM

Shulski-"Realtors support it because it'll make them more money from less taxes on all the properties they own"

Realtors don't necessarily own property. But those who do and rent it out will pay income taxes on the rent they collect and sales taxes for any improvement/repair they make.

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Shulski

Nov-29-13 1:55 PM

Oh sure, the real estate agency just wants less property taxes out of the kindness of their hearts and out of civic duty. Sure they don't pay real estate taxes. And they never own any property. They won't sell more homes if real estate taxes are lower. No, theres no profit motive. And it wasn't they weren't complicit in tanking the housing market along with bad lending from banks. That was all Barney Frank's fault.

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Shulski

Nov-29-13 2:00 PM

Sure, and realtors Remax don't own any apartment buildings they have to pay taxes on. No condos to pay taxes on. Just kind hearted businessmen.

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Shulski

Nov-29-13 2:00 PM

Did you ppl ever hear of Google searches?

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Capricorn1

Nov-29-13 3:13 PM

Shulski, what about all the people that would love to own their own home but the added burden of property taxes puts their dreams out of reach? On the house I recently sold, I personally had to turn away three young couples that could afford the mortgage but the taxes made it too difficult for them to buy.

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mikekerstetter

Nov-29-13 3:25 PM

Shulski, whatever profit is being made would be taxable income, so the real estate people would still be paying taxes on it.

Why do you feel the need to punish the poorer homeowners to get to the 'real estate people'?

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Shulski

Nov-29-13 5:53 PM

Capricorn, sorry to hear. Taxes and bad credit will be the death of this nation. Taxes need to come from somewhere. Or a truly libertarian party must arise. As I see it, it's either warfare or warfare. Republicans just wanrpt more cops, prisons and war, which are just as expensive as giving out money to people who don't want to work. It's why I like Ron Paul

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Shulski

Nov-29-13 5:53 PM

I mean welfare or warfare. Both cost money

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nobud74

Nov-29-13 9:39 PM

Shulski, the youth are the ones who must make this happen. The older (over 40) have become pretty set in their ways and aligned with one mess of a party or the other. When the youth finally realize O and his administration are purposely burdening them with the debt for all his programs and policies I hope they can pull off a third party that actually works for the people and not the government/big business/government employees/welfare lifers and all the rest who are a drag on the economy.

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