There is a lot of room in the middle there.

Yes you will file State and Local separately. Keystone Collection Group is one of a few of the local tax collectors. They are not very well-liked.
It's very simple stuff and can be done online.

Keep something come tax time, that's hobby income that needs reported (legally).

"So I live in Clearfield..." I'm sorry.

He looks like someone who bit me in a fight once.

Probably both, but I'm not sure. Curwensville borough is located within Clearfield county.

It's in the article FFS.

At least look at it from their point of view...
..

"Fuck your water. I'm rich now and don't live here anyways, so I don't give a shit."

Occupational privilege got renamed/branded to Local Service Tax - Police, Fire, and Ambulance

Local income tax and earned income tax are the same thing. This is based on both where you live, and where you do your job.

As far as why we have private companies collecting taxes, I suppose you are correct. The less cynical reason would be private labor is cheaper. It is probably a combination.

There aren't nearly as many deductions and credits for state returns, plus the withholding rate is generally the same for everyone as their is a flat income tax rate in PA.

Why would you agree you pay money you don't owe? Their number should be exactly what is shown on your W-2.
If that is not the case, then it is a problem that you need to take to your employer because they aren't remitting it correctly when doing your payroll.
My only other guess is that you forgot to submit your local tax return. I don't think all of the information is being presented here.

As far as Keystone Collections goes, I've heard they are shitty to deal with. I've also heard that about pretty much every organization that exists solely to collect your money.

I've done payroll for numerous companies in PA.

More ways to get more voters is what a healthy democracy should want, not less.