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Tax relief bill gives and takes

Published August 22. 2019 12:16PM

This strikes me as a case of robbing Peter to pay Peter.

A Republican senior citizen legislator from Lebanon County wants to eliminate the much-maligned school property tax in Pennsylvania, but his idea of replacing it with a new tax on retirement income has gone over like the proverbial lead balloon, especially in the Times News area.

Frank Ryan, 68, originally said he would file the bill soon, but now he wants to wait until he gets assurances from senior citizens across the state that they are on board with his proposal. Ever hear of waiting until hell freezes over?

Ryan proposes taxing retirement income, excluding Social Security, with a 4.92% levy. At this time, retirement income is not taxed in Pennsylvania.

Ryan’s proposal would add a new 1.85% local personal income tax that would go to school districts and bump up the current 6% state sales tax to 8% with the other 2% going directly to schools. As for renters, Ryan’s bill would compel landlords to pass the savings to them.

Although Ryan’s idea would exclude Social Security from taxation, the whole notion of substituting one tax for another doesn’t play well in Lehighton, Tamaqua or Walnutport.

My unscientific survey of 30 seniors in these areas, who have retirement income aside from Social Security, found just three who would be willing to pay a tax on this income in exchange for not paying school real estate taxes, and four others who were uncertain as to how they felt. The other 23 were “strongly opposed.”

For his part, Ryan thought that announcing the plan would be viewed as almost universally negative, but he now says that he has been “pleasantly surprised” by the willingness of those over the age of 65 to at least give his proposal a fair airing.

He also acknowledged that most of the negative pushback has come from the Lehigh Valley area.

Among those I surveyed, most said they are on fixed incomes and they have no children in school so they don’t see why they have to assume an equal burden with parents who do.

Most education defenders insist that it is the duty of all adults to help support their communities’ schools to help ensure our future as a nation of educated adults who can compete in a global marketplace.

This is just the latest attempt to address the property tax, and, just so we are clear, this bill, as most others, would not eliminate the property tax for municipalities and counties. Granted, both of these combined generally do not equal the amount taxpayers fork over annually to support schools.

In 2015, a school property tax-elimination bill, whose main sponsor was state Sen. David Argall, R-Schuylkill and Berks, failed after then-Lt. Gov. Mike Stack, a Democrat, cast the deciding vote to break a 24-24 tie vote in the Senate.

In Pennsylvania, the lieutenant governor presides over the state Senate but votes only in the event of a tie.

I commend Argall for not giving up. As you are reading this, a panel of state Senate and House legislators, including Argall, Sen. John Yudichak, D-Carbon; Sen. Lisa Boscola, D-Lehigh and Northampton; and Rep. Peter Schweyer, D-Lehigh, is wrestling with proposals on how to come up with alternatives to the onerous school property tax.

“I can’t go to the grocery store or to a Cub Scout event without someone asking me when we’re going to get rid of this rotten tax,” Argall said. “I have worked with many other senators to scrap school property taxes and create a dollar-for-dollar replacement.”

Boscola calls settling the issue once and for all as her “number one priority.”

Argall said the goal is to look for ways to move this difficult issue forward — sooner, rather than later — but he admitted that there are strong headwinds from special interest groups.

Argall’s 2015 proposal, which failed by a whisker, included higher state income and sales taxes to make up for the elimination of school real estate taxes.

By Bruce Frassinelli | tneditor@tnonline.com

Comments
The answer is not more/different taxes, the answer is finding savings in how schools operate.
The answer is to get government out of education. Let the parents choose what private school they wish to send junior to, and let the parents pay for it. The best way to devalue something? Give it away.
Bruce Frassinelli,

Good afternoon. Once again you have proven you live in a bubble and struggle with basic math and the ethical application of government.

Please schedule a debate so your emotional arguments can be replaced with factual data to be shared with the readership. Regrettably, the Time News allows you to rant away, talking to your friends and your buddies without the proper research of facts.

The vast majority of senior citizens have their homes as their largest asset and the district taxes as their largest burden. A mix that can create blight, and a destruction of retirement wealth.

The real estate tax system is a bust due to the ineffective local control of expenditures by the novice, volunteer board. Just look at the feckless rubber stampers in Lehighton giving up hundreds of thousands in savings over political leverage. They just passed what amounts to be an unsustainable budget.

That is the stakeholder's money to be used for education, not the board's personal and political whims.

So, Bruce, pick a day. We will create a panel, and you take your side and logic will be your opponent. Or, do the research and concede your argument was ill-constructed and we'll host an educational session.

Protecting the community from vexatious government is part of the responsibility of a free press and independent press. So, I ask you and the Times News, is the reporting accurate, and independent? Or is this paper filling the readers with fake news positioned as Bruce's editorials. What ever happened to journalism?


Sincerely,

Citizen David F. Bradley Sr.
I'd take you on. If the issue is expense, and I agree that is the case, then what sense is there in changing the type of tax?

Statistically seniors are the wealthiest age group in the state and we already have a very favorable taxing structure for them. Property taxes increase because expenses increase. If we shift the type of tax then that tax will increase. With the aging population growing we will have a population that has more seniors than working adults so shifting to an income taxing structure means we will rely on a shrinking source of revenue. As the tariffs are proving, increasing sales tax depresses consumption and increases prices.

Forget these senior driven taxing schemes. The answer is in finding expense relief. Give us a bill that tackles the big drivers such as healthcare and pensions.
You can call me names all you want, but the question remains.

Another example of those who are quick to claim religious high ground resorting to behavior that is not consistent.
The point of shifting the education burden away solely from the home owners is to ensure the equitable distribution of this burden across the entire population. This is what we desperately need now. The introduction of the sales tax over half a century ago was precisely for the purpose of funding primary education. How are those funds being used today?

Incidentally, I take exception to the comment that “Statistically seniors are the wealthiest age group”. Social security income barely keeps seniors above poverty level. I am very interested in seeing the data about wealthy Pennsylvania seniors, as they certainly do not reside where I live. Even those who are fortunate enough to have a pension or other retirement plan must pay taxes to the federal government on funds which were already taxed while they were employed.

The point that I do not see in these discussions is why we are not looking at those states which currently provide a primary education without having to tax property owners.
Dear Citizen
Your response to Bruce has me puzzled David.
You seem to have many of axe to grind, but this one is a double bit ax, swing it with care and respect or suffer self inflicted wounds.
Good Day
"This strikes me as a case of robbing Peter to pay Peter." - Bruce

Key takeaway is the word 'ROBBING'. And Bruce is not a solutions person, more of a man in a bubble problem.

Without transparency in consumption, efficiency in the use of the tax can not be obtained. School choice fixes the usage, giving the parents the choice of productive education.
As for the tax, the taxes on sales and income are 'voluntary' in that if you don't buy stuff or earn income there is no tax. The American idea of freedom is choice. Choice to live in a society of free and public education for instance, not necessarily free to waste taxes without implementing cost controls.

The real estate system removes the feeedom of land ownership, as the governments place an absolute claim on the property. Pay or meet the end of a sheriff's gun.

And, the general government consumption is out of hand. If they take less, freedom increases, people should be free in a society to decide their own charitable giving.
Read Davy Crockett, 'Not yours to give'.

Government needs to get out of the charity business, and out of the intrusion business.

Robbing Peter is wrong, and the legal use of force is only to be applied with the greatest cautions.

If you want to fix these things, vote in moral people who understand the non violence doctrine. And vote out all the incumbents, every time

Sincerely,

Citizen David F. Bradley Sr.
"This strikes me as a case of robbing Peter to pay Peter." - Bruce

Key takeaway is the word 'ROBBING'. And Bruce is not a solutions person, more of a man in a bubble problem.

Without transparency in consumption, efficiency in the use of the tax can not be obtained. School choice fixes the usage, giving the parents the choice of productive education.
As for the tax, the taxes on sales and income are 'voluntary' in that if you don't buy stuff or earn income there is no tax. The American idea of freedom is choice. Choice to live in a society of free and public education for instance, not necessarily free to waste taxes without implementing cost controls.

The real estate system removes the feeedom of land ownership, as the governments place an absolute claim on the property. Pay or meet the end of a sheriff's gun.

And, the general government consumption is out of hand. If they take less, freedom increases, people should be free in a society to decide their own charitable giving.
Read Davy Crockett, 'Not yours to give'.

Government needs to get out of the charity business, and out of the intrusion business.

Robbing Peter is wrong, and the legal use of force is only to be applied with the greatest cautions.

If you want to fix these things, vote in moral people who understand the non violence doctrine. And vote out all the incumbents, every time

Sincerely,

Citizen David F. Bradley Sr.
The real question with the retirement tax that you are already paying, known as SD property taxes, and proposed retirement income tax follows. Is your SD property tax bill greater than the proposed retirement income tax?

Your home does not generate the money to pay property taxes, you pay property taxes from your retirement income, thus, your retirement income is already heavily taxed and guaranteed to increase annually with caps above inflation and no end in sight. At current rate of increase your property tax bills will double in 20 to 25 years. Failure to pay annual bill and they take your home even if mortgage paid off. There is no such thing as home ownership in PA, you rent your property from the SD forever. Property taxes would be eliminated and impossible for SD to bring back without incurring huge penalties.

Currently, seniors pay a combined total of $3.2B in property taxes, the retirement income tax would generate $1.4B. Thus, the vast majority will see a tax saving, many significant. Compare your projected or actual retirement income tax to numbers in table.

Now that it has been established that most will win, the question becomes is it those that are the benefactors of the current funding and associated pensions that are loudest? Two-third of seniors in PA live on SS only, no complainers from this group! This leaves the small percentage of private sector folks that get a pension and all public sector employees that might object. Even those that have a retirement income tax of $100,000 likely still win. At that income these folks were top 5% wage earners with significant retirement savings and income. Their homes probably have tax bills well north of $5,000.


Annual
Taxable Annual
Retirement Retirement
Income Tax
$5,000 $246.00
$10,000 $492.00
$15,000 $738.00
$20,000 $984.00
$25,000 $1,230.00
$30,000 $1,476.00
$35,000 $1,722.00
$40,000 $1,968.00
$45,000 $2,214.00
$50,000 $2,460.00
$55,000 $2,706.00
$60,000 $2,952.00
$65,000 $3,198.00
$70,000 $3,444.00
$75,000 $3,690.00
$80,000 $3,936.00
$85,000 $4,182.00
$90,000 $4,428.00
$95,000 $4,674.00
$100,000 $4,920.00

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