Wednesday, January 25, 2012
Allentown's Tax Grab Will Yield at least $4.5 Million Annually
Using only the 4 businesses you mentioned, with a total of 2700 employees, the following revenues will be placed in the NIZ account, assuming an average salary for these employees of $40,000.00 annually (given that Butz and PPL are both headquarters, I feel that figure is conservative):
Local Services Tax: at $52.00 per person annually: $140,400.00 into the fund
Earned Income Tax: at $400.00 per person annually: $1,080,000.00 into the fund
PA State Income Tax: at 3.07% x $40,000.00 x 2700 annually: $3,315,600.00 into the fund
This totals over $4.5 million dollars into the fund annually, and does not include business privilege or PA sales taxes collected, all of which I assume are affected. It also does not include any of the numerous smaller businesses in the zone.
Was any reason given why this zone is set to be there for 30 years, when, with the amount of revenue being set aside yearly, the $20 million dollar debt could be paid off in 5 years?
This legislation gives the City of Allentown the power to delay payment of Earned Income Tax to area municipalities by two years for the next 30 years. Is the City controlling this money? Are there checks and balances on them to be sure they don't "borrow" any to balance their budget? How will they disburse the excess taxes collected: will the individual taxpayers be named and the amount (full or prorated) be listed so the tax can be properly credited by the tax offices -or will the City submit a lump sum for each municipality - and if so, who would determine the correct municipality?
I guess the biggest question is...how did this legislation get past the entire community of municipalities and school districts?