The economic news in the past couple of weeks has been relatively positive so that must mean it is time for another down to the wire battle in Washington to help restore pessimism! At the end of the month, temporary extensions to the payroll tax credit and extended unemployment benefits will expire. With unemployment high, both measures should be extended through the end of the year.
- Borys Krawczeniuk, Scranton Times-Tribune — Tax cut extension would save NEPA worker $410 or more:
Extending the Social Security payroll tax cut through 2012 would save a typical Northeast Pennsylvania worker at least $410 and probably more depending on where the worker lives, according to statistics released Tuesday...
The tax cut would cost about $10 billion a month, or $100 billion through the end of the year. Preventing the Medicare cut will require another $20 billion and extending unemployment benefits $45 billion, the Associated Press reported. The failure to extend the tax cut would cost the state 19,000 jobs, economist Mark Zandi has estimated, [Senator Robert] Casey said.
The Scranton Times-Tribune also reports on cuts in federal funding which are forcing local governments to cut back or delay infrastructure projects.
- David Singleton, Times-Tribune — County share of federal block grant funding shrinks:
Boroughs and townships in Lackawanna County will find federal Community Development Block Grant funding harder to come by in 2012.
The county Department of Planning and Economic Development is anticipating another 10 to 15 percent cut in the CDBG funding available for projects ranging from sewer improvements to handicapped-accessible curb cuts in the 38 municipalities where it administers the money, said Michelle Giovagnoli, CDBG contract manager...
Ms. Giovagnoli said the county received just under $1.56 million last year, down about 15 percent from 2010. A similar cut this year would slash the 2012 allocation to less than $1.33 million. Fewer grant dollars means more projects, especially larger ones, will likely have to be funded over multiple years, she said. "We have to go into future years to fund the project, so it gets delayed because we don't have the money to do it right away," she said, citing a storm sewer project in the Nebraska section of Archbald and a sanitary sewer project along Main Street in Dickson City as examples.
The Patriot-News this morning reports the Commonwealth has given Amazon more time to "get their software up to par" in order that they might collect Pennsylvania's sales tax. In the meantime, the Corbett administration is providing a handy table for consumers to figure out how much sales tax they might owe if they failed to keep track of their online purchases.
- Donald Gilliland, Patriot-News — Pennsylvania residents must now track, pay sales tax on online purchases:
Amazon, which has a distribution center in the Carlisle area, is one of the largest online retailers that have resisted collecting sales tax. The Department of Revenue said Internet companies with facilities in the state will get a seven-month reprieve in collecting the tax...
There’s no such clemency for the common taxpayer. This year’s tax form includes a special line — line 25 — requiring citizens to pay “use tax” on items they purchased over the Internet for which no sales tax was charged.
The Corbett administration didn’t announce it would be aggressively collecting use tax until November. If the taxpayer failed to keep receipts for all purchases, the new tax booklet offers a handy table of estimated tax based on income.
A curious feature of that table is that the wealthiest pay a rate 25 percent lower than the poorest of Pennsylvanians. The sales tax is 6 percent. The estimates in the table assume a person making $30,000 a year would buy $200 in goods over the Internet; it therefore suggests $12 be paid in tax. For people who make over $200,000, however, the table offers a choice: use a percentage of income or $71, whichever is lower. If the rich-folks rate (0.03 percent of income) were applied to the person making only $30,000 a year, he’d pay $9 in use tax, instead of the suggested $12.