Delco Higher Tax Burden Than Philly

Delco Higher Tax Burden Than Philly — Delaware County residents have a higher tax burden than those living in Philadelphia according to a study by Pew Charitable Trust.

Pew says that a middle class Delco resident paid 14 percent of his or her income — $8,557 on average — in sales, property and income taxes in 2015.

And that’s assuming one did not work in the city. For commuters, the bite was 19 percent or 11,661.

The 2015 tax burden for middle class Philly residents was 12 percent or an average of $7,704.

This is a huge change from Y2K, when the cost for a middle class Delco non-commuter was about 12 percent of income which averaged about $1,184 less than a Philadelphian. Delco Higher Tax Burden Than Philly

We suspect the main reason for the change is increasing educational expenses in the burbs.

Springfield does not need a $130 million new high school.

Hat tip Dom Giordano.

Delco Higher Tax Burden Than Philly

Cut Cost First, Thank You Joe Gale

Cut Cost First

By Leo Knepper

Last year the CAP PAC made its first major foray into county politics and it just paid dividends for residents of Montgomery County. In his race for Commissioner, Joe Gale ran as an unabashed conservative. Earlier this week Commissioner Gale took a vocal stand for those principles and saved his constituents $3.5 million.

Due to a law passed in 2013, Pennsylvania currently has the highest gasoline taxes in the country. That same law contained a provision allowing counties to enact a $5 registration fee for vehicles. Seeing an easy source of revenue, Gale’s Democratic colleagues were set to extract more money from Montgomery County taxpayers. That plan was derailed when Joe brought media attention to the pending vote. Unlike his Republican predecessor, who would “go along to get along”, Gale went to the public to make sure they were aware of the tax increase.

Cut Cost First, Thank You Joe Gale
Joe Gale actually fights for the citizens.

There is a great deal of similarity between what is happening in Montgomery County, and what typically happens in Harrisburg. Rather than looking at how to save money, elected officials enact a new fee or tax and take the money from their constituents. In this instance, the $5 per vehicle fee would purportedly go to “infrastructure” projects. While infrastructure is arguably one of the few legitimate services government should provide, taxpayers are not getting the most for their money.

As Commissioner Gale points out, and we have been talking about for years, infrastructure and other construction projects are subject to wage controls that force taxpayers to overpay for labor. These wage controls come in two basic types, an artificially calculated “prevailing wage” and project labor agreements (PLA’s). Both of these wage controls benefit organized labor and PLA’s also exclude nonunion contractors from the bidding process.

Eliminating prevailing wage and PLA’s would drastically decrease the cost of public projects and make tax dollars go much further. However, it is politically easier for elected officials to take more money from taxpayers than it is to take on organized labor.

We applaud Gale’s willingness to stand up for taxpayers. His actions tell us that the CAP PAC made a good investment in his candidacy.

Mr. Knepper is executive director of Citizens Alliance of Pennsylvania.

Cut Cost First, Thank You Joe Gale

Alex Rahn Wanner Associates And Their Clients

Alex Rahn Wanner Associates And Their ClientsAlex Rahn Wanner Associates And Their Clients — As the onion unpeels in Chester County answers are revealed to questions that have long puzzled those in the “my-burden-is-hard-please-don’t-add-to-it” constituency as to why with our crushing government debt incomprehensibly bizarre spending choices are made.

For instance, giving millions in subsidies to rich horse owners.

And this seemingly drunken spending happens just as often when Republican voters give political power to those who campaign against such things.

Republicans controlled all branches of Pennsylvania government between 2011 and 2015. Why does Planned Parenthood still get money? Where is the desperately needed pension reform? Why do rich horse owners get millions from taxpayers?

Well, as noted the answers are being revealed.

Chester County remains a Republican stronghold and most of its voters can still be said to fall into the social conservative AND fiscal conservative categories. Val DiGiorgio, the man running the county GOP, however, as noted earlier, appears to have a close relationship with those running extreme-liberal Democrat stronghold Montgomery County.

His right-hand man Alex Rahn,  as also noted, has a wife who gives big to liberal Democrat causes.

Now, some might argue that this is not Saudi Arabia and one can’t control what one’s wife does and they’d be right.

Of course, that doesn’t mean they have to get her a county job either.

But enough about spouses as that is just the gravy and not the meat.

Alex Rahn Wanner Associates And Their Clients
Val DiGiorgio’s client list. Click to enlarge.

DiGiorgio is a registered lobbyist whose clients include well-loved and friendly Comcast and the Delaware River Waterfront Corp. started by Philadelphia Mayor Michael Nutter in 2009.

Rahn is the Chesco GOP Area 1 chairman who is/was the reputed mastermind behind the purge attempt of Chesco committeepeople who don’t have their minds right. He is  a senior associate/lobbyist with Wanner Associates, a major Harrisburg lobbying firm. Their client list includes Standardbred Breeders Association of Pa., and the Philadelphia Federation of Teachers, a huge opponent of pension reform.

Residents of Area 1, ask yourself does Rahn’s interests lie in making you happy or his clients? It’s a fair question. Residents of Chester County, ask yourself if Val DiGiorgio is more likely to address your concerns or those of Philadelphia or Comcast? And who is more likely to have their phone call taken seriously by a legislator, you or DiGiorgio?

Now everybody, ask yourselves why the-powers-that-be always push for bonds and tax hikes to resolve fiscal problems rather than commonsense spending efficiency that might mean less income to the government-connected but more income for you?

Alex Rahn Wanner Associates And Their Clients

Chesapeake Energy Bankruptcy Seen With Tax

Chesapeake Energy Bankruptcy Seen With TaxBy Sen. Scott Wagner: Chesapeake Energy Bankruptcy Predicted With Wolf Tax

Last Friday, Dec. 4, PennLive.com published a story titled “Severance Tax ‘100 percent guaranteed’ to be in next PA budget, Wolf policy secretary says”.

I have a prediction that Governor Wolf and his policy secretary, John Hanger, might find interesting.

I consider myself to be a fairly qualified and experienced investor – I regularly go on Yahoo Finance and check out financials and news of public companies.

Here is my prediction: I predict that Chesapeake Energy (NYSE Symbol – CHK) will file for bankruptcy protection within the next 12 months.

Here is my reasoning:

#1 Natural gas prices are at historic lows – natural gas companies are not able to cover their fixed costs and cover debt payments at the current price – to simplify this – if gas is selling for $2  per gallon and your fixed costs are $3  per gallon the company is losing $1 per gallon, and as a result the company will burn through massive amounts of cash quickly – in business when you run out of cash – you have a HUGE problem.

I researched Chesapeake’s most recent financials – just in the quarter ending September 30, 2015 – their third quarter revenue was $2.893 billion   – after paying ALL expenses they lost $4.695 billion  – that means just in the third quarter alone Chesapeake would have burned through $1,802 billion  of cash. They cannot continue at this rate. Chesapeake will run out of cash.

#2 Natural gas pricing is not going up for quite some time because the natural gas supply is far GREATER than demand – in addition, there are almost 1100 gas wells in PA that have been drilled, and are capped, and are not producing gas. Almost all of the 1100 wells do not have pipe lines in place to carry the gas to the main transmission line so there is still a lot of infrastructure that needs to be installed. This infrastructure costs money. Gas companies do not have the cash to install these pipe lines at the current low natural gas prices.

#3 Another large issue is that oil and natural gas companies routinely hedge their prices to protect for a price collapse – this is a type of insurance – typically these hedges only go out for two years. In simple terms, many of the natural gas companies had hedges in place when prices were a lot higher that paid them double or triple the current market rate for their gas supply. When prices are as low as they currently are, hedging is not an option.

#4 Chesapeake Energy had a class action lawsuit filed against them last week by Pennsylvania landowners because they are deducting from royalty payments the cost to transport the gas from the wellhead to the main transmission line.

Many landowners  receive zero royalty payments after Chesapeake deducts the transport costs, and some land owners have received invoices to back bill for prior years transportation costs.

The class action lawsuit will be settled for cash that Chesapeake is running out of.

#5 If you are familiar with stock market investing there is term called margin. This term means that you can buy a stock for cash and the brokerage house will lend you money to buy more stock – this is called buying stock on margin. SEC rules do not allow a stock to be purchased on margin if it is under $5  per share. Last Thursday at the close of the New York Stock Exchange, Chesapeake stock closed under $5  per share. This means that any investor who used margin or borrowed money to purchase Chesapeake stock had a margin call which is a demand to sell the stock immediately so the loan is repaid. When a stock drops under $5  per share large investors flee. Investors will shy away from Chesapeake because their future does not look good.

This morning as I am writing this  ( 10:10 a.m. Dec. 7) Chesapeake stock is trading at $4.17 per share, down almost $.40 since the open of the stock market.

Chesapeake is one of several companies in Pennsylvania that are choking financially because natural gas prices are so low – there may very well be more companies than just Chesapeake Energy that will be forced to file for bankruptcy protection.

So what is my point? It’s this:  Governor Wolf ran his campaign for Governor telling everyone that he was going to get $1 billion dollars in severance taxes from the natural gas companies. With  current natural gas prices a severance tax would yield $100 million dollars at best.

There is currently an impact fee – tax in place – so the severance tax would cost the gas companies more money, which they do not have.

The reality is that the gas companies will pass any taxes on to consumers – which means YOUR gas bill will go up if there is a severance tax imposed.

Don’t believe me?

Read York Daily Record’s latest article, “Columbia Gas Gets Smaller Rate Hike Than Sought” which talks about the gas company passing on the costs.

And by the way, this morning the price for a barrel of oil dropped under $40 – it is currently at $38.71 at 10:20 a.m..

Oil companies are facing the same challenges as the natural gas industry because the price of oil is at historic lows.

Sen. Wagner represents the 28th District in the Pennsylvania Senate.

Chesapeake Energy Bankruptcy Predicted With Wolf Tax

Wolf Tax Will Kill Pa Jobs

By Earl BakerWolf Tax Will Kill Pa Jobs

We all remember positively the Spirit of ’76, when Americans declared Independence! But we also need to remember the Spirit of 1791, when Pennsylvanians fought against oppressive taxation in the Whiskey Rebellion. The farmers of Western Pennsylvania who had a thriving sideline business did not welcome additional taxation and were willing to put up a fuss about it. Ultimately no shots were fired and the excise tax was ended.

As we brace to fend off an attack of new energy taxes, we’re re-living a tradition that is alive and well of trying to protect productive Pennsylvania industry and jobs.

Pennsylvania’s current tax battle is bigger and more serious than the Whiskey Rebellion, but it has certain similarities. As was the case in 1791, the fighting issue today is taxation of a thriving domestic industry — oil and gas production. Fueled by rich natural gas deposits in the Marcellus shale, energy production has been a major source of economic growth and job creation in Pennsylvania for the past 10 years. We’re now the second largest natural gas producing state in the country, second only to Texas. And the nation is now the world’s number one producer of oil and gas. The historic role of natural resources in our state is now poised to return Pennsylvania to economic greatness. But not if it is stifled with burdensome new taxes.

Oil and gas producers already pay one of the highest effective corporate taxes rates, higher than most industries. And the commonwealth’s energy tax battle of 2015 is not limited to the state. We’re facing tax attacks at both the state and federal levels.

Our new governor is intent on imposing a state severance tax on all natural gas drilled in Pennsylvania. The most obvious outcome of that tax would be to make Pennsylvania natural gas uncompetitive with neighboring states like Ohio and West Virginia. It’s true these states have severance taxes, but the total taxes paid by Pennsylvania producers is already higher than the tax bite in competing states. To reach the billion dollars the governor wants the energy tax to produce, it would hit rates far beyond those of other producing states.

As the global glut in natural gas production drives down prices, it’s hard to imagine a more counterproductive proposal than Gov. Tom Wolf’s. However, President Barack Obama’s plan for a massive tax increase on domestic oil and gas producers nationwide gives Gov. Wolf’s proposal a run for his money. The size of these tax hikes would inevitably lead to a surge in consumer energy prices.

Additionally, the president’s plan disguises his energy tax hike as “tax reform.” By that he means stripping away legitimate tax deductions from oil and gas producers while leaving them in place for all other industries. That is the quintessential opposite of tax reform.

Right now we need to stage our own version of the early Pennsylvanians’ Whiskey Rebellion and enlist our state and congressional representatives in turning back these tax attacks on an industry that means economic strength and jobs.

Earl Baker is a former state senator and Chester County commissioner.

Wolf Tax Will Kill Pa Jobs

Wolf Wants Funeral Tax

Wolf Wants Funeral Tax
Gov. Wolf wants to tax funerals

For Pennsylvania’s unthinkers who punched button for Tom Wolf last November, be told: Our new governor wants to tax funerals.

That’s right, he wants to expand the sales tax to previously exempt items including caskets, burial vaults, services provided by funeral homes and grave stones.

This would raise the cost of the average funeral, which is $6,500, by $429.

Wasn’t Gov. Corbett’s historic gas tax enough to solve our money problems? It would have been if the goal wasn’t to create a feudal system were we serfs are expected to support lifestyles of wealth and leisure for the lords and ladies in the political class.

Has there been any talk of cutting public spending? LOL.

How about a tax on public pensions? That’s a tax we can support.

Wolf Wants Funeral Tax

Tom Wolf Corporate Tool

Tom Wolf Corporate Tool
Tom Wolf Corporate Tool

Gov. Tom Wolf is proposing cutting Pennsylvania’s corporate tax in half — 9.99 percent to 4.99 percent on net income — by 2018.

It’s probably a good thing. Comcast will certainly appreciate it.

And what are corporations but entities created by a legal process? Good lawyers and accountants can minimize net income by creating marketing and administrative expenses  that would other otherwise not be considered. These invariably benefit the lifestyles of those running the corporation.

So good for Wolf.

But we kind of wonder about his priorities. Pennsylvania has the highest gas tax in the nation — thank you Tom Corbett. It has an extremely burdensome property tax, which puts disproportionate pain on the elderly and unemployed, which to Wolf’s credit he says he wants to address. It also has a sales tax, which,  while on the low end does not account for the reality that the most populated part of the state is a half-hour ride from tax-free Delaware.

The income tax is also on the low end, but that is something Wolf wants to raise.

Overall,  tax burden for a resident of Pennsylvania is in the nation’s to 10.

Yet, the first thing Wolf talks about is cutting the corporate tax.

The ease of living in Pennsylvania does not look like it will improve.

Unless you are a corporation.

Tom Wolf Corporate Tool

 

Tax Hike Unnecessary For Pa.

Tax Hike Unnecessary For Pa.

State Senator Scott Wagner (R-28)  has issued a  statement concerning Pennsylvania’s financial situation  in response to  the mid-year budget briefing by Budget Secretary Charles Zogby given Dec. 3.

The important points are that the state has $30 billion annual revenue, a $5 billion, 60-day line of credit and a $2 billion is not unrealistic for this time of year.

Here is the  statement albeit with some editing.

I’ve been sitting back listening to my colleagues on the other side of the aisle, and unfortunately it is apparent that none of them understand how the finances of a business operate,.

The Commonwealth is identical to an operating business where there is revenue and there are expenses. As an owner and operator of multiple businesses, I fully understand that my business enterprises would not be able to operate without an operating line of credit from a bank. The Commonwealth has revenue of approximately $30 billion per year. Any experienced business operator or chief financial officer would agree that the Commonwealth of Pennsylvania should have an operating line of credit equivalent to 60 days of average revenue, which would be an operating line of credit of approximately $5 billion.

As a private sector business owner, I know how to manage a budget and what factors will impact the budget. The Democrats are trying to spin the budget issue to scare the public into thinking the only solution is more tax increases, when in reality, revenue comes in at different times throughout the year. The $2 billion deficit is not unrealistic at this time of year. A large portion of the revenue that comes into the Commonwealth is received between Jan. 1and April 15  through payments for PA State Income Tax.

Many Democrats are using the budget discussion as an opportunity to grand-stand politically and criticize Governor Corbett for the equivalent of borrowing against a line of credit to cover revenues that are slower at the end of the year. Any private sector business operator needs to understand cash flow into and out of their business. Businesses routinely operate with lines of credit. This is what businesses do – and if some of the critics would have ever signed the front of a paycheck rather than the back, they might possibly have a better understanding of cash flow, borrowing money and cycles throughout the year that affect cash flow.

Also, last winter was the worst winter that many businesses have seen in 30 years, and this impacted revenues to the Commonwealth.

At one of my companies, we spent approximately $50,000 on snow removal, which is more than double of any year that the company spent over the last 15 years. I would be curious to know how much additional expense the Commonwealth spent on snow removal at Commonwealth owned or leased facilities throughout the state.

Just consider this, if car dealers in all 67 counties throughout Pennsylvania sold 500 less vehicles per county on an average, that would equal 33,500 less vehicles sold. Factoring transaction value of $25,000 per vehicle times 33,500 vehicles would result in lost revenue of $837,500,000 to the car dealers. Sales tax of 6 percent lost to the Commonwealth on revenue of $837,500,000 would equal $50,250,000.

Many people who had planned on purchasing a new vehicle during the winter may have had to cancel their vehicle purchase to replace a roof, spouting, or a new furnace because of the severe winter we just experienced.

The bottom line is this: many of my colleagues on the other side of the aisle just don’t understand the complexities to operate a business and this unfortunately means that they struggle to understand economics. We face a deficit next year because costs continue to climb for pensions, human services, corrections, and debt.”

For the last four years, Democrats could have worked with Governor Corbett to solve these daunting issues and instead chose to do what they’re doing now – distorting the facts and complaining without offering solutions. Governor Wolf, yesterday, to his credit, chose to delay actions and wait until he gets to spend some time reviewing the budget in depth before offering any commentary.

I continue to stand by my statement that Pennsylvania does not have a revenue problem, it has a spending and expense problem.

For the benefit of all of Pennsylvania, the Democrats need to step up to the table and begin working on actually fixing problems rather than just criticizing and grand-standing politically.

Tax Hike Unnecessary For Pa.
Tax Hike Unnecessary For Pa.

Tax Hike Unnecessary For Pa.

Pennsylvania Cell Phone Tax

The big three taxes inflicted by the Commonwealth of Pennsylvania and its subdivisions are sales, property and income.

However, there are a host of sneaky little ones out there and they do add up.

Pennsylvania’s cell phone tax is 14.05 percent which is eighth highest in the nation. Washington State has the highest at 18.6 percent while adjacent Oregon has the lowest at 1.76 percent.

Note, this is on top of the federal 5.82 percent tax on wireless service.

A study  by the Centers for Disease Control found that 41 percent of American households have only cell phone service.

Pennsylvania Cell Phone Tax

Pennsylvania Cell Phone Tax