Tax swap: Higher sales tax for lower property taxes?

Question

My governor (PA) proposed 1% state sales tax increase in order to lower property taxes (it is not clear to me by what amount).

My initial blush is: "at least my property taxes were deductible".

Am I looking at this the wrong way? Will I ultimately come out ahead or behind by this shifting of the tax burden? What scenario would ensure that I came out ahead, short of shopping in WV or OH?

FYI: In PA, there is no sales tax on groceries, clothes or Drugs/medical supplies as wall as other minor exceptions.

Answer 1

Beware about any raise in taxes! I'd rather keep it the same because property taxes are deductible.

Remember how they sometimes vote for a temporary sales tax hike? Nothing is temporary

Answer 2

In general sales taxes are considered regressive since it falls the same way on everyone, rich or poor, for purchasing items. The fact that the sales tax excludes the esssentials cushions the blow, but regressive nonetheless.

There's a bit of pandering involved in claiming to reduce the tax burden on property owners in claiming that the ordinary taxpayer would not have to pay as much in property taxes as a result of raising sales taxes. We're assuming all of the sales tax increase is actually going to end up in municipal coffers to reduce the need of towns to levy taxes to cover schools and other services. Problem is, the money to run one town may not be the same for another, so now we're off figuring out state formulas to make sure the right amount gets there.

In any case, the sate may end up putting the increase in the general fund, such that townships might not see any benefit and property taxes will remain at current levies anyway. Oh well.

Answer 3

Texas has no state earnings tax. Texas has a state sales tax of 6.2% that could want to be as intense as 8.2% with interior of reach use tax. California, Tennessee, Rhode Island, New Jersey, Mississippi, Indiana, Minnesota, Nevada, and Washington all have better valuable sales tax costs than Texas. he resources tax is the biggest source of funding for interior of reach facilities in Texas. resources taxes help to pay for public colleges, city streets, county roads, police, fireplace probability-free practices and many different facilities.