The House Finance Committee on Monday held a second public hearing on House Bill 1776, or the Property Tax Independence Act. The bill, sponsored by state Rep. Jim Cox, R-Berks, aims to achieve the long-discussed goal of eliminating property taxes to fund public schools by creating increases in sales and personal income taxes, as well as the inclusion of previously untaxed goods and services.
But new figures from the state Department of Revenue show a $3.5 billion gap between the estimated $12.5 billion earned by property taxes, and what the new tax structure would raise. In response, Cox said he and bill co-sponsors would consider increasing the personal income tax even further to meet the mark.
My friend Frank Pintabone on the Easton School Board warned me about this, as an earlier version of this bill had the same problem. It’s a big problem, but ultimately not a dealbreaker for me because:
Pennsylvania’s personal income tax rate is just more than 3 percent, the lowest flat tax rate personal income tax in the nation. Cox’s original plan would boost that rate to 4 percent, a nearly 33 percent increase, which, according to estimates from Cox’s office, would bring in $3.46 million annually.
You could raise a lot more money introducing a progressive tax structure to the income tax.