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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsPenn. GOP passes law allowing employers to keep and spend 95% of workers taxes
The Republican party of Pennsylvania has stolen 95% a worker's state income tax by allowing the money to be redistributed to his or her employer. In terms anyone can understand, workers in Pennsylvania may now pay 95% of their withheld state taxes directly to their employer. Workers see zero in tax reduction, or cash benefit.
According to the law, known as the "Promoting Employment Across Pennsylvania Act", an employer is free to collect and keep 95% of their worker's tax money and spend this money however they deem appropriate. There are, however, no provisions that stipulate how the money is to be spent. The employer could use the money to hire more workers, or they could use the funds to treat the management to a vacation in paradise. It's a gray area, and of course lawmakers are expected to behave in the best interests of the people, something that is historically on shaky ground.
Read more: http://www.examiner.com/article/penn-gop-passes-law-allowing-employers-to-keep-and-spend-95-of-workers-taxes?cid=db_articles
valerief
(53,235 posts)budkin
(6,703 posts)unblock
(52,243 posts)taxes are legal, and subsidies for industry are legal. they're just allowing the company to net out the two payments out of convenience.
the appropriate remedy is to vote the bastards out of office.
sadly that is easier said than done.
DJ13
(23,671 posts)Ken Burch
(50,254 posts)Last edited Thu Nov 22, 2012, 01:03 AM - Edit history (1)
As they see it, if the state can't do anything, it only hurts the n_____s, anyway.
alp227
(32,025 posts)Ken Burch
(50,254 posts)if they don't just GIVE it all to those friends for free.
Prism
(5,815 posts)And the state continues functioning how?
freshwest
(53,661 posts)Ken Burch
(50,254 posts)BTW...will PA have a Dem legislature starting this January, or will this insanity go on?
Igel
(35,317 posts)You have to be an eligible company. You have to enter into an agreement with the state. Part of the agreement, at least, is to create 100 new jobs in the first two years of the agreement.
Then the company can retain 95% of the *new* employees' PA taxes for 7, 8, or 9 years. 7 if the new employee earns 100% of the prevailing wage in the county, 8 if it's 110% of the prevailing wage, 9 years if it's 120% of the prevailing wage). Nothing if the job is below the prevailing wage.
You can have the government cut the taxes to businesses that create jobs. No requirement that the tax cut be passed through to the worker. It's a way of having the state subsidize the new job, to lower the monetary threshold for opening up a new position. The employer pays less than he otherwise would. The employee gets a salary that he otherwise wouldn't, you'd suppose.
Or you can have the company just keep part of the taxes, provided the job pays enough. It amounts to the same thing, once the scary language is read.
PA income tax is something like 3%. This reduces the cost of the new employee (to the employer) by 2.9%. If you the business pay $50k then you, the business, net 2.9% of that. You, the state, benefit because there's a new job able to pay for food, health care, housing, etc., etc., instead of sitting in an employer's worry fund. It's obvious how the employee benefits. (Why the employee should have a tax cut because he gets a new job is sort of a question.)
The amount of the de facto tax reduction is actually quite a bit smaller than the proposals I've seen from the administration.
Oddly, all but the PA tax rate and knowledge of Obama's job creation tax credit I got from the article itself.
Beaverhausen
(24,470 posts)madrchsod
(58,162 posts)EC
(12,287 posts)who pays the refunds, when all these low paid employees file their taxes?
W T F
(1,147 posts)Smilo
(1,944 posts)waaaay to go GOP - you selfish greedy bastards.