Mayor Moves (But Not Far Enough) On Tax Reform

While it was great to see that -- after receiving hundreds of emails directly to his blackberry -- the Mayor softened his stance and called for more tax reform, the Mayor's proposal to deepen cuts to the gross receipts portion of the job-killing Business Privilege Tax fall short of what Philadelphia needs to grow jobs and attract and retain employers.  The city's major dailies agreed in recent editorials:

[Inquirer: ] Street also took another step toward business tax reform. His proposed $5 million trimming of the gross receipts portion of the Business Privilege Tax sends the right signal.  Too bad, though, it's only a one-year tax reduction. A better policy would be the multiyear cuts recently approved by a bare majority on Council, yet vetoed by Street.

With so large a surplus, the mayor appears to have ample wiggle room to grant businesses the longer term tax relief they need.  Additional wage tax cuts already are in place to help wage earners. Similarly, the targeted 10-year abatements on real estate taxes are proving their worth in generating growth. So why not do more to improve the city's business climate with long-term BPT reductions?  With this budget surplus in view, that's the difference that the mayor - with whatever necessary prodding from Council - should make. ( Full Editorial )

[Daily News: ]  And yes, there will be tax cuts. The most notable will be a cut - more like a nick - to the gross-receipts portion of the business-privilege tax. While not nearly as aggressive as this page and others have argued for, Street is proposing a cut that would result in a $21.2 million hit in revenue for fiscal year 2007. Earlier Street vetoed a tax-reform package passed by City Council, saying the city couldn't afford a deep cut in the business-privilege tax.  ( Full Editorial )

[Bulletin:] Once again, Philadelphia taxpayers get the shaft.  The city's attituce toward business taxes and business development beggars belief.  On the one hand, we "'can't afford" tax relief, even as we "afford" hundreds of millions of dollars in patronage pork and municipal boondoggles. [snip]

We must create an environment in which the diverse enterprises of the information ecnomy can thrive.  You don't do that with a Nixon-era tax structure.