patching...
Welcome back, Patch Blogger!

Tea Party Speaker: Eliminate Property Taxes

Plan pitched to Lehigh Valley group would call for taxes on more goods and services

 

"Property taxes are killing the state's economy and its residents."

No statement David Baldinger made Friday night could be stronger than that.

Speaking before the Lehigh Valley Tea Party at the October monthly meeting at the Charles Chrin Community Center in Palmer Township, the administrator with the Pennsylvania Taxpayers Cyber Coalition discussed the proposed elimination of property taxes.

Baldinger, who considers himself the foremost state expert on property taxes, pulled out a Reading Eagle newspaper from August showing 1,086 tax sales just for Berks County alone.

"If you multiply that by the 67 counties in the state, that's insane," he said, adding that he's served as an advocate of the proposal since 2004.

Baldinger told the audience of about 100 people that their property taxes could go up by 30 percent over the next few years due to rising school costs, which he said could reach $10 billion for kindergarten through 12th grade education in the next decade.

"It's an unfair system that needs to be abolished," he said. "We are treating our homes, the places where we live, like they are producing income for us."

The Pennsylvania Coalition of Taxpayer Associations School Property Tax Plan would replace all school district property taxes as well as school Earned Income Taxes and others such as the per capita tax. The plan wipes out the taxing ability of local school boards.

It expands the sales tax base to include more goods and services that aren't currently taxed. Those include lawn mowing, landscaping, haircuts, sports and theater tickets, dry cleaning, candy and gum and magazines. And it does not raise the sales tax rate above the current 6 percent.

The plan increases the personal income tax by .50 percent to 3.57 percent, basically a swap for the EIT.

"We're sick of hearing the phrase 'property tax relief,'" Baldinger said. "Where's all that money we were supposed to get from the casinos?"

He added that any tax relief plan is doomed to failure if the system isn't restructured and that relief revenue is easily overtaken by rising school costs.

The PCTA cites 10 reasons for replacing school property taxes: Achieve true home ownership, stabilize school funding, help prevent foreclosures, restore plummeting real estate values, boost the sagging house market, attract businesses, generate jobs, create a stimulus, increase personal wealth and stop costly reassessments.

"The legislators say this is a complex issue that isn't easily resolved," Baldinger said. "All they need is the courage and the will to get it done. Almost everyone likes this plan."

The Tea Party endorses reduced government spending,opposition to taxation in varying degrees, reduction of the national debt and federal budget deficit, and adherence to an originalist interpretation of the Constitution.

The movement, named after the Boston Tea Party, gained a national foothold in 2009, and had vice presidential candidate Sarah Palin as one of its supporters.

While it's not a national party, most are Republicans who have found dissatisfaction with mainstream GOP leaders.

Also during the meeting, the party addressed numerous topics: Announcing a $10 annual membership fee starting in January, lined up a speaker for next month on "UN Agenda 21," elected Eric Neubauer, Christine Bongiorno and Bill Bullman for offices in March 2013, promoted a Nov. 5 education workshop, and touted a charity that supports the troops.

Related Topics: Lehigh Valley Tea Party, Property Taxes, and Schools

Nancy

10:27 pm on Friday, October 7, 2011

I agree with abolishing property taxes. I've almost lost my house 2 times already. My income is solely disability and child support. So can you imagine how hard it is for me to pay for anything extra can barely buy food and pay for bare needs

Reply

Jon Geeting

11:12 pm on Friday, October 7, 2011

Surprisingly, I agree with most of this. The property tax is a uniquely unfair kind of tax, and makes it difficult to adequately fund public services for a number of reasons. The most obvious is that retired people and others on fixed incomes have to pay it. It would be better to tax current wage-earners. Another reason is that PA's reassessment policy is broken. County elected officials have to vote for reassessments, but they're unpopular so they rarely happen. Reassessment is also expensive, the estimates are inexact and wealthier property owners end up challenging their reassessments to get their tax bill lowered. It's too much work for the County.

It would be a lot more efficient to have a County-wide consumption tax, and collect taxes at the point of sale. That way there would be no tax dodging and no political fights over the *process* of tax collection. Tax increases would also be less painful, since the tax base would be broader, and people would pay with their purchases rather than as a lump sum.

One thing I disagree with is capping it at the current tax rate. That's a political question and should be decided in elections.

Reply

mark wood

7:39 am on Saturday, October 8, 2011

here here, I vote to get rid of the politicians who support a system that they themselfs proclaim is broke.

Reply

Jim Wetherhold

9:48 am on Saturday, October 8, 2011

The state's economy is also effected by multiple families living in one house because of the high cost of living however the bite is on the state because they are collecting only one property tax. Drop the property tax and increase the sales tax.

Reply

Rosemary B

9:53 am on Saturday, October 8, 2011

So glad next month they are talking about UN Agenda 21! Only just became aware of it myself and it is scary stuff for America.

Love the ideas of revamping Taxes! But won't people who pay small businesses with cash be able to avoid the tax? I know that is an opposition brought up against Herman Cains 9-9-9 plan.

Reply

Jon Geeting

12:25 pm on Saturday, October 8, 2011

The other thing to consider is that if you're switching to a County-level sales tax, there's no obvious reason it shouldn't be a progressive consumption tax. It would be very simple. You would be taxed on your income minus your savings. If you save more, you pay less. It's your choice what your tax bill is. If you choose to be thrifty, you won't pay as much.

You can make this progressive by taxing high-end goods at a graduated rate and setting a generous standard deduction.

Reply
Comment_arrow

Rosemary B

12:53 pm on Saturday, October 8, 2011

Sounds complicated! Was hoping it would be reformed in a simple to understand, harder to screw the common person sort of way!

Jon Geeting

1:00 pm on Saturday, October 8, 2011

It's not really complicated. You'd be taxed on your income minus your savings.

Reply
Comment_arrow

Rosemary B

10:04 am on Sunday, October 9, 2011

What happens whenn you withdraw your savings? Do you pay tax on that then, like 401k's and IRA's. Or is it tax free as long as it is saved for a specific amount of time? At what rate would it be taxed at? Progressive or flat? Many questions leads to complicated to me.

John Schubert

3:09 pm on Saturday, October 8, 2011

Sweeping changes are dangerous. Have you forgotten the famines when Stalin collectivized the farms?
It's naive to think that abolishing property tax in one fell swoop wouldn't create serious dislocations. You won't fill the tax revenue gap ($60 million per year just in Southern Lehigh, a small district) by taxing haircuts and magazines. If you have a county-based consumption tax, people will take their business to the lowest-taxed county. If a Pennsylvania consumption tax tries to collect the $5,000 a household currently pays in property taxes, there's gonna be a LOT of driving to New Jersey.
Every alternative shifts a considerable tax burden away from business and onto the shoulders of individuals. How popular would THAT be?
Every proposed tax change brings out protesters. When Gov. Rendell required local school districts to propose a change in the income tax, we found that out. The proposal was to shift from the current earned income tax to a personal income tax. The shift would only cost you if your investment income were over $80,000 per year. The school district heard from a stream of protesters, apparently all of them destitute millionaires, giving the "I'll have to eat cat food" speech.
It's not that I like paying property taxes. I detest it. But I see through the intellectually sloppy chest-thumping. An untried, vaguely defined alternative will not be better.

Reply

BucsLehboy

6:23 pm on Saturday, October 8, 2011

Taxpayers need to seriously look at School Choice, consolidating districts and eliminating tenure rules for teachers in the school system. I am not advocating punishing teachers, just dismantling the system of tax, spend with zero accountability. Teachers Union support of politicians that spend, spend and spend more in eduscation with diminishing returns.

Reply
Comment_arrow

Rosemary B

12:44 pm on Sunday, October 9, 2011

School choice would help in so many ways. One size does not fit all in education and maybe some schools could find a way to educate better and for less.

Jim Wetherhold

8:51 pm on Saturday, October 8, 2011

Lets keep it simple. There are too many loop holes as it is now that allow moving money from poor to wealthy.

Reply

Jon Geeting

12:59 pm on Sunday, October 9, 2011

Rosemary - at the end of the year, you would report your total income and total savings and you would be taxed on the difference. I would favor a progressive rate structure, but as with all taxes, the exact rates should be determined by the political process. You want low taxes, so you'll vote for anti-tax politicians. Others want generous public services, so they'll vote for liberal politicians. As ever, we'll see who wins.

John - consumption taxes and sales taxes are not "untried," they are in use in cities, states and nations all over the world. There is a wealth of academic research on the effects of switching from one kind of tax to another. We can't predict everything, but we can come up with a pretty sophisticated model of the economic impact we could expect from different tax changes. You raise an important point, but I don't see this as a good enough reason to never switch tax regimes. I think it's a good argument for commissioning studies before anything gets voted on.

As for tax shopping, this already happens at the municipal level. Lower Macungie has no property taxes, because they raise most of their revenue from earned income taxes. The core cities collect a greater share of revenue from property taxes because of their residents skew poorer. Moving to County-based consumption taxes would make tax shopping less of a problem, not more.

People will protest any change you want to make - that's never a good reason not to try something.

Reply

Ronnie DelBacco

4:54 pm on Sunday, October 9, 2011

This is a discussion long overdue for the main stream. It will take courageous elected officials not concerned about re-election to raise such discussions at school board meetings. As a citizen candidate I have only my own public voice to join with other citizens. If elected I'll be able to represent all those with similar and differing views on the issue to find an agreeable solution. I know one is out there and as a candidate committed to lower taxes I am willing to stick my neck out for the tax payers.
The comment about unions' suport for tax and spend politicians is very relevent to this discussion as are the comments about school choice. Full disclosure here; I have come out in strong support of the educational mission of teachers while taking an equally strong stance against the Teachers' Union in Easton for its continued fiscal abuse of tax payers through unrealistic contract demands that are slowly and surely crippling the tax payers without producing proven results of educational progress among our children. The two topics are not separate and need to be covered extensively for the benefit of our childrens' educational needs and the tax payers ability to fund them. True home ownership is dependent upon the elimination of property taxes. A consumption based tax would level the playing field for property owners and bring those who currently rent (and do not receive a property tax bill) more equally into the arena of funding education.

Reply

Leave a comment