Monday tax talk

Two interesting stories today about taxes and their bleeding into other matters. The first is at the state level, where it appears matters are headed for a show-down between the Republican legislative majority and the Democratic governor.

As it heads today into its final week before the winter break, the Republican-controlled legislature is preparing to send Gov. Rendell a slew of bills that he is on record saying he opposes, while ignoring the Democrat's call for things he wants most: fixes to his signature property-tax relief law and an increase in the state's minimum wage.

The bills Rendell is unlikely to like include a cap on overall budget growth (see prev. here) and an assortment of tax cuts. Motivation for this show-down appears to be a combination of preparation for the 2006 race (where the GOP candidate might hang Rendell's vetoes around his neck) and ongoing attempts to distract voters from their lingering displeasure with the legislature.

Meanwhile, in the city of Philadelphia, Vern Anastasio* has a piece in the Inquirer arguing that it's time to reconsider tax-abatements for big developers. Originally such tax breaks encouraged middle-class folks to renovate homes or build on empty lots, but now they are fueling large developments that often place burdens on the surrounding neighborhoods:

Today, most people who apply for the tax abatements are developers, not middle-class homeowners. These developers then sell the abated homes at prices few people could have imagined just five years ago. Once the homeowners pay that inflated price and move in, the property-tax bills of their neighbors increase.

The author here has some promising suggestions for how the abatements could be restructured to better favor individual homeowners and protect the buffer zones around new development. The time for such changes has almost certainly arrived.