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The new death tax philosophy: Tax the death, leave the estate?

By - Last modified: March 18, 2013 at 9:54 AM

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Brent Burkey
Brent Burkey

Lawmakers who have made a lot of hay lately over getting rid of the “death tax” on farmers and now small businesses should take a look at the outline of what I'll call the 76s — bills declaring independence from certain property-tax burdens.

Companion legislation, House Bill 76 and Senate Bill 76, was recently announced and aims to get rid of the burden of paying school district property taxes by asking citizens to give up just a penny more per dollar when they buy something and just a hair more than that when they collect their paychecks.

Pennies, mere pennies, or so the drumbeat led by state Rep. Jim Cox and state Sen. David G. Argall goes. They go so far as to show you in their announcement how small 1 penny and roughly 1.25 pennies are when compared with 100 pennies.

So, I was just getting over how insulted I felt over that little display of arrogance when I started to look a little further into the other ways the lawmakers plan to raise enough revenue to totally offset school district property taxes in the commonwealth.

Turns out, the plan also relies on closing special interest loopholes and more broadly applying the sales and use tax in Pennsylvania, on top of the rate going up from 6 percent to 7 percent. Sounds like it'll mean much more than just my 2 cents in the end.

And, on the long, long list of loopholes for products and services they want to close are ... wait for it ... wait for it ... funeral parlors, crematories, death care services, caskets and burial vaults.

In other words, death tax for all! There is something morbidly egalitarian about it in concept, but shameful at the same time.

I pay property taxes to my school district and, trust me, I'd love to avoid the bill every year.

But, then I think back to my days as a police beat reporter. I'd write about young men being gunned down on the streets or teenagers dying in traffic crashes. My tax break shouldn't come on the backs of those grieving parents.

Or for that matter, at the expense of students who need textbooks to study and break the cycle of poverty — at a time when we're fighting to lower the costs of learning and our businesses are increasingly dependent on well-educated workers. Textbooks are another "loophole" they've put up for closure.

Now, before you stop reading this, call me a liberal and launch into a "makers vs. takers" or "class warfare" monologue, think of this: Our economic recovery is increasingly seen as dependent on spending picking up by all classes. Right now, consumption by the "haves" doesn't appear to be the problem.

And I do see merit in the idea that property taxes can be less fair because they do not change for a senior citizen who bought a house 40 years ago and now has limited income. Nor for someone who owns a home but lost his or her job. But the same people can choose to cut back on discretionary spending and lower their sales tax burden.

Still, in the end, I have a hard time seeing the 76s as anything other than a tax shift onto the less wealthy to benefit those who generally are richer. The relief is just too broad while the new burdens are too high on people who can't afford them.

After all, if you have enough money to decide to buy a house, it's logical to expect you to have enough left over to both eat and pay your property taxes. But not everyone has enough money to even get to that decision, or they freely decide not to take that road. This proposal comes for their money anyway.

So, sure, let the small business escape the estate tax if it might have to liquidate and put workers on the street in order to pay the bill. That's bad for everyone.

But at the same time, don't make a struggling family who rents a home choose between a proper funeral and memorial for Dad and going out to eat together for the foreseeable future.

Coldly stated, both are bad for the business climate.

Brent Burkey covers retail, tourism, and Lebanon and York counties. Have a tip or question for him? Email him at brentb@centralpennbusiness.com. You can also follow him on Twitter, @brentburkey.

Brent Burkey

Brent Burkey

Brent Burkey covers York County, agribusiness, energy and environment, and workforce issues. Have a tip or question for him? Email him at brentb@cpbj.com. Follow him on Twitter, @brentburkey.

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