Is It Sayonara to Property Taxes in Allegheny County?

Stop the reassessment in Allegheny County, no matter what it takes.  That has been the consistent mantra from the County Executive (before and after his election) who has asked for the Legislature to enact a moratorium on court-ordered reassessments and has now enlisted the support of several City Council members. This group is backing an effort of a state Senator who wants to allow Allegheny County to end assessments and in so doing end the levying of property taxes by the County, its municipalities, and its school districts. 


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More and More Taxpayers off the Hook

As income tax day, this year April 17th, came and went many people lamented having to file. But as the Tax Foundation points out, filing does not necessarily imply owing money to the Federal government.

In 2011 they released information detailing the percentage of filers who have either zero or negative tax liability. The table, dating from 1950 to 2009, shows that since 1984 when the rate was about 18 percent it has been rising steadily. It surpassed 25 percent in 1998, then 30 percent for the first time in 2002 before finally reaching 41.7 percent in 2009. While we haven’t quite reached the point where half of Federal income tax filers are submitting returns with either a zero or negative liability, if this trend continues, that mark may not be far off.

But liberals are quick to dismiss this statistic, even though it can be substantiated, because it doesn’t advance their agenda of squeezing more from the rich and redistributing wealth. They like to fan the flames of class warfare and are quick to offer their own statistics, often unsubstantiated and taken on blind faith, to promote their ideology. And of course since they can’t argue with the message, they shoot the messenger and anyone affiliated with them.

A Roll Call of Local Taxes

"Tax Freedom Day", an illustrative construct created by the Tax Foundation, is the calendar date on which the typical taxpayer has "…earned enough money to pay this year’s tax obligations at the federal, state and local levels". This year it was April 12th nationally; given the variance of income taxes (flat, progressive, or not levied), sales taxes (statewide, local option, or both, and what type of exemptions), corporate taxes, etc. at the state and local levels freedom comes at various points in the 50 states. This year Pennsylvania’s is today (April 14th); not as early as Mississippi (March 26th) but not as late as Connecticut (May 2nd).

How long local residents have to work to pay for local taxes in Allegheny County is a discussion for another day after rigorous data collection. Suffice to say it is quite easy to collect the information on rates and types of taxes for governing bodies in the County. Here is what the three biggest general purpose governments-Allegheny County, the City of Pittsburgh, and the Pittsburgh Public Schools-levy.

  • Allegheny County-Real Estate, Alcohol, Car Rental, Hotel ($300 million in 2011)
  • City of Pittsburgh-Real Estate, Wage, Parking, Payroll Preparation, Local Services, Amusement, and Realty Transfer ($314 million in 2011)
  • Pittsburgh Public Schools-Real Estate, Wage, Realty Transfer ($265 million in 2011)

Both the County and the City (along with all municipalities in Allegheny County) partake in the revenue from the Regional Asset District sales tax (1%). The City is counting on $11 million this year and the County for $40 million. This does not count the funding that goes directly to assets that receive support from the tax or have debt repaid by the tax.

How Would PA’s Income Tax Compare?

The proverbial "other shoe" dropped today in the state budget deliberations when the Governor proposed a temporary, three year increase in the state’s personal income tax from 3.07% to 3.57%. The Governor says that even with the increase PA will still have the "third lowest" income tax rate.

Here’s what the latest data from the Tax Foundation shows on personal income tax rates in the nation. Seven states have no income tax; two tax just interest and dividends, not wages; that leaves 41 states with a personal income tax.

Pennsylvania and five other states (CO, IL, IN, MI, and UT) have flat income tax rates (as opposed to graduated rates). Right now PA has the next to lowest rate out of those six states. An increase to 3.57% would move it ahead of IN (3.4%) into second next to lowest (IN and IL, at 3%, would be lower). Only CO and PA have no standard deduction or personal exemptions according to Foundation data.

Going back to 2000 data, CO and MI have lowered their rates; UT moved from a graduated system to a flat rate; IL and IN made no changes; PA increased from 2.8% to the current 3.07%. A boost to 3.57% would represent a 30% increase in the income tax rate since 2004, when the rate was raised to the 3.07% level.