Tuesday, June 17, 2008

Senate Republicans push for PA tax cuts

Senate Republicans have approved $240 million in tax-cuts for Pennsylvania residents and business. But don't go spending the money just yet.

Standing in the way of returning your money to you is Gov. Ed Rendell and the Democrats who control the state House of Representatives.

Senate Republicans are billing their tax-cutting package as immediate relief for Pennsylvania taxpayers who are struggling to pay for rising food and gas bills.

"This is long-term thinking to try to motivate the economy to go in the right direction," Sen. Jake Corman, R-Centre, said during floor debate.

However, Democrats maintained that the tax cuts might be worthy in another year when the state has more cash to spend, according to The Associated Press.

In other words, once your tax dollars get to Harrisburg, don't expect to see them again.

Rendell and the Democrats would rather keep the money and spend it on pet projects as part of the governor's $28.3 billion general fund budget.

The balance the $28.3 billion spending plan, Rendell wants to use the $400 million cash surplus anticipated at the end of the June 20 fiscal year.

A government "surplus" is another way of saying people paid too much in taxes.

The GOP plan would lift the forgiveness limit on the state's personal income tax every year for three years, with the amount varying by the number of dependents, according to the AP. By the third year, for example, a couple with two dependents making $37,000 or less — up from the current limit of $32,000 — would not have to pay the state's 3.07 percent income tax, the wire service says.

It would raise the cap on the losses that a businesses could carry forward to offset taxes on future profits to $5 million, or 20 percent, of taxable income. Current law allows $3 million, or 12.5 percent of income, the AP says.

It also would adjust the way corporate net income tax is calculated to lighten the burden on businesses that have employees and assets in the state, according to the wire service. Lastly, it would double the income tax break to $50,000 that businesses could claim on the purchase of equipment and machinery, the AP says.

The cuts would add up to $96 million in the first fiscal year, and $246 million in the 2010-11 fiscal year, the AP says.

If you'd like Rendell and the Democrats to return some of your money this year, it's time to start calling House members and demanding support for the tax cuts for working Pennsylvanians approved by the GOP Senate.

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