HONESDALE, Pa. — The proposed earned income tax ordinance would allow Honesdale to collect 1% from everyone who lives in town and from many of the people who work there.
In return, the borough would lower its property tax rate.
"We started by wanting to make it a little more fair for them, where they might not have as much or any earned income so we can give them a property tax break, but not hurt the tax base but also were really looking at public safety were looking at our stormwater systems were looking at ways we can fund those without sending out property tax through the roof," said Jared Newbon, a Honesdale Borough councilmen.
Borough officials say the EIT ordinance will reduce property taxes by 11%.
Still, some taxpayers who showed up at the Wednesday night council meeting were skeptical.
"Honesdale is a HUBZone declared by the federal government and were already a distressed area, and by adding this tax, it's an undue burden that people are not going to be able to cope with if you consider the fact that food costs more, gas cost more if going to cost more to heat your home," said Brian Wilken, the President of the Greater Honesdale Partnership.
"Our businesses are trying to survive; it's hard enough to retain employees, let alone now have to tell them because they work in the borough were going to take even more money from them," said Suzie Frisch, a community member.
If enacted, the borough would impose a 1% earned income tax on wages for both residents and non-residents working within the borough.
Two things are important to note.
Earned income tax will not impact school property taxes, and earned income tax refers to only taxing money that people make. It does not impact things like social security and insurances.
"A person making $25,000 is going to pay $250 of tax, and the person making $250,000 in investment income isn't going to pay a dime. It is extremely unfair, and I strongly recommend against it," said Tom Shepstone, a resident.
The borough points out that of the more than 2,500 municipalities in Pennsylvania, only 93 of them do not have an earned income tax in place.