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Tax Reform Now

letters so far.

Last spring, the rubber met the road when hundreds of taxpayers banded together to demand local tax relief and pressured the City to continue wage tax reductions. As the Philadelphia Tax Reform Commission, the independent body created by you, the voters, finishes its final report for reducing and restructuring taxes, the City Administration is crafting Philadelphia’s Five-Year Plan.

This plan is the financial roadmap for Philadelphia’s future and it is vital that you tell the Mayor to put the tax recommendations of the Commission into the Five–Year Plan. You also need to urge City Council to support the tax package in order to keep tax reform moving forward. Don’t give the bureaucrats the chance to delay reform by saying the recommendations were not included in their planning.

The Commission, which is made up of 15 members appointed by the Mayor, City Council, the City Controller and city business organizations, voted 14-1 for a comprehensive overhaul of the City’s tax structure. The tax reform package the Commission is proposing meets their charge of reducing Philadelphia’s tax burden equitably in order to improve its competitiveness in retaining and attracting residents and businesses.

The reform package that will be delivered to the Mayor and Council for further action by November 15 outlines bold steps to change how Philadelphia taxes. Some of the recommendations include:

• Total elimination of the business privilege tax over the next ten years, which is levied on both sales and profits of firms operating and doing business in the city;
• Reform of the business tax, while it exist, to begin to level the playing field between companies inside and outside the city and between incorporated and unincorporated firms and to help startup firms manage early operating losses;
• Reduction of both the resident and non-resident wage tax to an equal rate of 3.25 percent by 2014 to encourage larger companies to locate here and end the tax incentive for residents with city jobs to leave;
• Investment of at least $1 million in Greater Philadelphia Urban Affairs Coalition’s campaign to help return an estimated $150 million in annual unclaimed federal and state tax forgiveness credits to Philadelphia families;
• Phase in land-value taxation so that, at the end of ten years, 50 percent of all real estate tax revenues will be generated from a tax on the value of land and 50 percent on the value of structures;
• Reassessments of property values to reflect 100 percent of property value instead of fractional assessments that contribute to unequal tax burdens among property owners;
• Adoption of a budget-based real estate tax system that would obligate the Mayor and City Council to set real estate rates each year after reviewing assessment estimates;
• Creation of the position of Taxpayer’s Advocate to work with citizens on assessment appeals, improve the public’s understanding of the process, and review actions of the Board of Revision of Taxes.

Remember that it was the power of people just like you, cutting across the social and economic divides, that made tax reform a priority to be addressed for growing our City. Census figures show that between 100,000 to 165,000 jobs and 400,000 residents have left Philadelphia since 1970, with taxes credited as a huge factor in the exodus.

While the Commission has embraced a deliberate and incremental approach to tax reform, we understand that reforms must begin to be implemented now because time is not on our side. That is why you should write the Mayor to tell him to put the tax recommendations in the Five–Year Plan and write to City Council urging them to support the tax package.

Take Action/More Information

• Yes, I will take five minutes to write my elected officials about the tax reform our city so desperately needs!
• Read letters others have written.
• To see the complete package of tax recommendations you should log onto the Commission web site at: www.philadelphiataxreform.org.

Thank you!

Robin Leary, Faxbank Manager
info@philadelphiataxreform.org