Push for Tax Reform Going Strong Through Summer

Today's (Sunday, July 25) Philadelphia Inquirer business section includes a column by Andrew Cassel that gives additional urgency to the push for tax reform.  In the column, Cassell details a new report prepared for the city to use in its labor contract negotiations by Wharton tax guru Bob Inman.  The report discusses the city's tax competitiveness. 

The report says that the modest tax cuts that the city has put in place since 1996 have prevented the loss of 22,000 jobs, but still, Philadelphia remains uncompetitive with surrounding jurisdictions.  Think of it...22,000 jobs would have been lost if we hadn't been reducing our taxes.  Imagine if we could be doing more to reduce the crusing blow of taxes...we could be retaining and attracting employers, providing jobs for city residents, and infusing new vitality into communities across the city.  Cassel concludes his column:

Everywhere you look, people and money are becoming more mobile, and less rooted to any place that doesn't appear encouraging to growth or entrepreneurship.

The result is a hard, cold, uncaring fact: If people think Philadelphia overtaxes them, they won't come or stay here.

Inman began pointing this out in the early '90s, when he explained that the city was at the top of its "revenue hill." That's the place where it could no longer boost tax revenue because any increase in rates would be more than matched by a cut in the tax base. That is, higher taxes would drive people and business out of town.

Almost 15 years and two mayors later, that situation hasn't changed. And it means that if the mayor and other officials want more money to spend on public services, they have only one option:

Tax reform. More of it, and faster. (Full Column)

Friday's Philadelphia Daily News included a letter to the editor by Councilman Frank Rizzo who hinted that the push for Business Tax Reform would be the subject of City Council action this fall.  Certainly, Philadelphia Foward will be pushing in that direction.  Councilman Rizzo wrote, "Following the hard work of the Tax Reform Commission, Council had the votes to pass significant reforms of the wage tax and the business privilege tax (11 votes) but not enough to override a mayoral veto (12 votes). The mayor signed the first, but vetoed the second.  We got significantly more wage tax cuts, but no more business-privilege cuts - and no promise of its eventual elimination. But there's always September..."  (Full letter)

 

And in case you have been away, the Philadelphia Daily News has posted on its website an archive of past tax reform articles -- just visit the the Daily News website to check it out.

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