PENNSYLVANIA Rep backs plan to alter tax structure

Residents would start paying sales tax on clothing and retail food purchases.
GROVE CITY, Pa. -- Pa. State Rep. Dick Stevenson of Grove City, R-8th, said he supports a plan to change funding for public education by eliminating property taxes and expanding the state sales-tax base.
It's a bipartisan plan put together by members of the Commonwealth Caucus, a group of state House members including him, Stevenson said.
"This proposal also seeks to make the tax structure in Pennsylvania more fair to taxpayers," he said.
"Plan for Pennsylvania's Future" would eliminate all school property taxes over a two-year period as well as the local wage tax, occupational privilege tax and school per capita taxes levied by schools.
Change in sales tax
The plan would also reduce the state sales tax from 6 percent to 4 percent but it would expand the sales-tax base by imposing the tax on clothing sales in the state, something that isn't taxed now.
The tax would also apply to all retail purchases including food (which isn't taxed now at the grocery store but would be taxed under this proposal), entertainment and many services.
Food stamp purchases, public transportation, prescription drugs and hospital services would be excluded, Stevenson said.
"A broader based sales tax will spread out the tax burden with consumers paying a little at a time rather than a large chunk when property tax bills are due," he said.
The elimination of the school property tax would more than offset any additional sales tax property owners pay, he said.
For public education
The plan requires that revenue from the sales tax be dedicated to a public education fund rather than have it channeled into the state's general fund.
Stevenson said school districts would be guaranteed the same level of state funding they now receive, and poorer districts will get more. The state would also assume all debts for schools, he said.
School districts would retain the right to re-impose a wage tax or even a personal income tax if they decide they need more money than the state is providing. However, voters would have to first approve such a tax in a ballot referendum, Stevenson said.