Would County Sales Tax Help or Hurt?

Pennsylvania Governor Rendell says there are no broad-based tax increases in his 2009-2010 budget-but he does wants to give counties the chance to raise sales taxes by one percent. If the legislature would approve Rendell's plan, all counties, except Allegheny and Philadelphia which already have a 7% sales tax, would have the option of boosting their sales tax from 6% up to 7%.
Some County commissioners have been lobbying the state government about a sales tax for years. In fact, the County Commissioners Association was in Harrisburg last week urging the governor to allow them to impose either an earned income tax or sales tax.
Doug Hill, the County Commissioners Association of Pennsylvania's executive director, says county governments' hands are tied right now, because they can only raise revenue through property taxes.

But, Kevin Shivers, the state director for the National Federation of Independent Businesses, says any sales tax increase would hurt consumer confidence and cripple small businesses.
However, Hill argues that a sales tax would let counties lower property tax rates.

Shivers is also wary of a Rendell proposal to eliminate a one percent rebate that businesses that pass along tax revenues to the state on time receive.
He says that cuts into operations' bottom lines, and too many companies are already struggling through the recession.