Mike's Memo

Eliminating Property Taxes

Eliminating property taxes is a key element of my "Promise to Pennsylvania."  However, during my first two years in office, almost all of the discussion about eliminating these onerous taxes has been in the House of Representatives, and most of that discussion has been unsuccessful.

Earlier this year, I informally polled residents of the 48th District about the idea of expanding the state’s Sales and Use Tax to eliminate school property taxes.  Responses were generally supportive, although some concerns were expressed about taxing food and clothing. As I continue work on a legislative package, I want you to see first-hand the numbers I am using to develop this initiative.  

On my website there is a worksheet that shows how expanding the Sales Tax base can be used to eliminate school property taxes. The total revenue from school property taxes in Pennsylvania is approximately $10 billion. The worksheet allows you to add a tax rate (current Sales Tax rate is 6 percent) to item(s) not currently taxed (for example 8 percent), to generate the revenue needed to eliminate school property taxes ($10 billion).  Also on the website is a list of items that could possibly be added to generate replacement revenues to eliminate school property taxes. There is an area on the worksheet that keeps a running tally; once your "deficit" reaches zero, you have enough revenue in an expanded Sales Tax to completely eliminate school property taxes. Keep in mind, for each $1,000 in property tax reductions, people would need to spend $16,667 in newly taxable items under an expanded Sales Tax to equal the savings of eliminating school property taxes.

I'm curious as to see what you come up with and encourage you to e-mail me your thoughts!

Town Hall Meetings Planned

In the next few weeks I will hold town hall meetings across the 48th District to explain my property tax elimination plan in greater detail.  Please watch future issues of "Mike’s Memo" for dates and locations. Also, please contact Beth Williams if you are interested in helping organize a meeting in your area.

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