Consumers looking to consolidate debt who live in Pennsylvania may benefit from tax cuts being proposed by Governor Edward Rendell to close an upcoming budget deficit.
The proposed reductions would lower the state sales tax rate from 6 to 4 percent in all areas except Allegheny County, which would see its rate lowered to 4.7 percent. The sales tax in Philadelphia, which currently sits at 8 percent, would be lowered to 5.3 percent as well.
Rendell rationalized the declines as a means to lower costs for consumers who are consolidating debt and looking to buy a new vehicle. The lower rates would result in nearly $500 in taxes that could be saved by consumers.
"My proposal lowers our sales tax rate by a third, increases the fairness of our business and sales tax systems and helps our state avoid the financial crisis that we know is only 18 months away," Governor Rendell said. "We will eliminate special interest exemptions on items except necessities like food, clothing and medications, and increase fairness because every item not subject to the sales tax makes the tax on everything else far too high."
Revenue collected from sales generated by the lower taxes would be used to cover the estimated $2.3 billion budget deficit the state expects to have in 2011 once Rendell leaves office.