Governor Ed Rendell concedes his push to change Pennsylvania’s sales tax law is an uphill battle. For the past few weeks, the governor has criss-crossed the state, stumping for his plan to lower Pennsylvania’s sales tax rate, but eliminate several of its exemptions.
He wants to put the proceeds from the broadened tax base into a special fund that can’t be tapped until next year.
Opponents of the plan call it a tax increase, but Rendell says that’s wrong.
"Well for the average citizen, they actually lose—save about seventeen dollars in taxes a year, because of the cut in the rate. And, for example, if you buy a car under my proposal – if you buy a 24-thousand dollar car – you save 480 dollars in most counties."
Rendell says a few of his initiatives should pass....
"The House has already passed two of my five proposals. They’ve already passed a severance tax on Shale and a tax on smokeless tobacco. I think the vendor sales discount they’ll pass, as well. I think they’ll pass the Delaware Loophole. The sales tax is the toughest, because this is an election year, and it’s complicated, and legislators are afraid to do things that are complicated."
Revenue from a natural gas drilling tax and smokeless tobacco levy would also go into the special fund, which is designed to help the state transition away from relying on federal stimulus dollars.