Saturday, August 1, 2015

John Baer: State income tax and city sales tax will increase

Gov. Ed Rendell and Mayor Michael Nutter Link: Budget will be late, painful [Daily News]

John Baer: State income tax and city sales tax will increase

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Gov. Ed Rendell and Mayor Michael Nutter

And taxes?

GOP leaders have said no, not even Ed's proposed new taxes on tobacco and energy, and especially no expansion of general taxes on sales or income.

But now a personal-income-tax hike is floating around, and Corman (who doesn't like the idea) tells me, "I'm not one who takes everything off the table."

Meanwhile, Democrats say, "Oh, it's only as a last resort," which is code for "Grab your wallets, kids, a tax hike is coming."

A 1 percent increase in the state's 3.07 percent PIT - it was 2.8 percent when Ed took office - would bring in $3 billion.

(Maybe somewhere in the process, someone can explain: (a) how so many families go year after year without increased income - and sometimes less income - yet manage to make ends meet, while government spends more every year no matter what; and (b) if so many government programs do such good and needed work, why it seems that the needs never lessen.)

Nutter's request for authority to raise the sales tax from 7 percent to 8 percent to help deal with his own budget deficit?

It'll happen. It's easy to do. He's not seeking money from the Legislature. And, just like last year when it agreed to allow the city to raise the local hotel-occupancy tax, the Legislature really doesn't care what Philly does to itself.

"I don't see any reason why it won't happen," Corman says. "I think we'll try to help the mayor."

Rendell proposed a $29 billion spending plan in February. It awaits House action. The Senate budget is $27 billion. Both are probably more than the state has to spend - which is why a tax hike is coming.

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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