Tax Reform is About Jobs and Neighbors - Here are Some of Their Stories
Philadelphia's burdensome and unfair taxes chase jobs and neighbors from the city, stop firms and families from coming to Philadelphia, and leave scars of decay on every neighborhood of the city. If you email Philadelphia Forward your story about how taxes have affected you, we will post them here...Welcome to Philadelphia Indeed! This is my first full year of business in Philadelphia and the amount of money I am paying for the BPT FOR NEXT YEAR makes me sick. I'm paying the City of Philadelphia more than the Federal Government this year and what little I thought I had is gone. I've heard other small business owners talk about doing business in the city and now I understand why. This is absurd.
Real Problems With Real Estate Assessors I have experience shabby treatment at the hands of the philly tax assessor. My place at [deleted to protect the submitter from reprisals] had been being taxed incorrectly as 2 separate properties (it has been deeded as a single property since 1950). The square footage is also incorrect, and is still listed as 1800 square feet, even though this is impossible for a 2-story structure that measures on the interior 26' x 26' at best. The gentleman I purchased the place from was ill, and was unable to muster the time and energy to battle these guys. The best deal the assessor (I can find his name, but I believe he was the head guy) would offer me, after admitting their error, was to reduce my taxes by 25%, rather than cutting it in half since they had been taxing the property twice. When I attempted to say that cutting it by 50% would be fairer, without even attempting to recover the taxes I and the previous owner had paid erroneously for 2 properties, he threatened to further re-assess my property.
Flawed Real Estate Tax Bills We purchased our home (a shell) for $27,000 in 2000. With a lot of sweat equity, we renovated the property over a period of four years, nights and weekends. We had building permits, but our ignorance about the paperwork requirements of the tax abatement program precluded us from getting an abatement. Our taxes went from about $450 per year to $963 in our first years in the home, then jumped to $3686 in 2007! Of course, by the time we found out about the increase, the appeals window had closed. Our mortgage jumped by $500 per month due to the escrow held by our Mortgage company, making our home nearly unaffordable. We were late in appealing, but the assessor used his discretion and dropped the valuation by $1500 over the phone. The assessor put the increase right back in for 2008, plus an additional amount bringing our 2008 tax bill to $3702! We pay more taxes than nearly every neighbor in the surrounding neighborhood, although our home is modest by comparison with some of the $400,000 plus homes that have been purchased here recently. Of course, these were done by developers who know the system and the properties enjoy 10 year abatements. In some cases, neighbors with City Hall connections did renovations to older properties and received 10 year abatements, actually lowering their taxes.
Real Problems With Real Estate Tax Bills I recently bought a home on the 700 block of S. Marshall street (running between Fitzwater and Bainbridge in between 6th and 7th). A nice block with many nice homes. My home is less than 1400 square feet with no garage and was renovated in 2002. It is nicely done on the interior, however, many of my neighbors homes are significantly larger or the same size, have garages and are also equally nice on the inside, completely renovated or built in the last 10 years. However, for some reason, starting in 2002 with whomever owned the property before me, the owners of my house have been forced to pay $2,000 dollars more per year than almost all of my neighbors and more than $3,000 more than many. I was told by many that things would even out in the next assessment. Instead the gap apparently continues to grow. In the recent reassessment my tax is going up more than $300 per year. I do not know the effect of the reassessment on all my neighbors, but with regard to at at least one neighbor that I work with, who has a larger and equally nice place and who is currently paying approx. $2,000.00 less in taxes, I know her taxes are going up less than $200. Instead of working to close the gap, the recent reassessment is actually causing the gap to grow. Probably almost every house in the neighborhood is "undervalued" based on actual potential resale value of the homes (including mine) and I am certainly not advocating that my taxes or the taxes of my neighbors should go up dramatically. I also have no problem paying fair taxes, but these discrepencies in taxes among neighbors on the same block are simply unjustified, unjustifiable and wrong.
Will Growing Company Grow In Philadelphia? As President of a small, but growing, (21 employees overall with 15 located in or around Philadelphia) company I can testify that modifying the existing tax structure on businesses will result in increased city revenues and a more attractive business climate.
We're Putting Her Out Of Business I am a person who works from home typing. I am being put out of earning a living by having to pay the BPT and NPT.
Another Potential Resident Lost To Taxes I am a highly specialized young professional with a tech degree getting ready to start a career. I am in the position of choosing between several jobs and one of my options is in Philladelphia. At first I was seriously considering moving to Philladelphia but then I discovered your wage tax. From my perspective, it seems ridiculous for me to start a career there when job offers in many other places offer the same salary but come with far less tax burden. For example one option is Austin, Texas. They have no wage tax or state tax. That is nearly a 10% difference in my take home salary. What really makes it rediculous is that Philladelphia is one of the dirtiest most crime infested cities I have ever been to. It seems that if you are going to have these higher taxes there should at least be some benefit, but I haven't seen it. I admit that I havn't looked into property taxes or housing costs, but really they wouldn't apply to me or other young professionals anyways as we are renters. So I have to assume there are many people like me out there. Is Philadelphia not concerned with attracting young professionals? If not, that seems foolish to me as that is where the future of any city lies.
Taxes Give Chicago The Edge My husband and I moved here a year ago so that he could attend grad school at Penn. We thought Philadelphia seemed like a nice city and chose Penn over other schools because we thought we would stay here permanently. I have to say though, that the taxes are killing us. I HATE seeing that big chunk of my paycheck go to a city that seems to waste the money on corruption and bureaucracy. We try to support local businesses but often their prices are too high and I know it's not their fault - it's that heavy tax burden they have to pay. Unfortunately we now plan to move back to Chicago after my husband finishes school. Philadelphia's taxes are a major factor in this decision.We Had Him At "Hello" But Lost Him At BPT This past winter, I have begun to seriously consider moving back into Center City, despite the increase it would cause in my automobile insurance, because I spend quite a bit of time there for both work and pleasure. I lived in Center City and the Graduate area for 12 years before moving out to Narberth 8 years ago. As a sole proprietor of a consulting practice, I work from home, so moving my residence would also mean relocating my business from Montgomery County to Philadelphia.
Then, this week, my accountant completed my tax returns. In 2004, less than half my work was for Philadelphia based clients. However, in 2005, a client I work for quite a bit relocated operations into Philadelphia, so over 70% of my work was based in Philadelphia. As a result, when my Business Privilege Taxes were calculated, I realized that more than a full month of my working time was spent last year just earning enough to pay the BPT. If I moved my residence, and therefore my business, into the city, all my earnings for two months work out of each year would be handed over just to pay the onerous BPT.
As a result of this realization, I have shelved any ideas of moving back into Philadelphia, and will concentrate on working for clients who are also located outside of the city.
I Am Incorporating Outside The City I currently am incorporating right outside the city limits, and setting up a telecommuting system to avoid having to pay this tax. Why do you want business to leave Philadelphia?
50 Years In Philadelphia Threatened By The BPT As the President of a company that employees 15 people in Philadelphia, but that also has operations in Florida, Delaware and Virginia, I am asking that you please sign Bill 050669AA to reduce the Business Privilege Tax so we can grow jobs in Philadelphia. Our 50 + year history in Philadelphia is at risk.
Business Could Grow In Philadelphia, But Not With The BPT My business could really grow in Philadelphia. But the margins in my business are not large enough to warrant taking an office in Philadelphia, because of the Business Privilege Tax. I am sure there are thousands of successful entrepreneurs on the fringes of the city who feel as I do. Running the numbers just doesn't make sense, as long as the BPT is in effect.
300 Employees Could Be In Philadelphia, But Not If The BPT Stays My company employes 300 people and rents space in Jenkintown, just over the Philadelphia line. I live in Cherry Hill. I would much rather work out of Philadelphia than Jenkintown. The main reason I'm not is the Business Privilege Tax.
Franchise Shoulda, Coulda Been Here -- But For the BPT I operate a home care franchise focusing on the home-bound senior adult population in the Phila. and suburban surroundings. Before starting my business I had several territories to select from in the Greater Delaware Valley. After considering several locations, including Phila., it became clear to me that had I selected Phila., in spite of its huge senior population, I could not operate profitably given the business tax burden. As it stands now, ten per cent of our revenues are derived from services provided in Phila. For the privilege of doing business in Phia. we are taxed on our gross and net profits. In additon, we had to procure a $200 business license. The franchise that I purchased in part of a multi-national master franchise that after twelve years of selling franchises has not been able to attract franchisees to operate in Phila. Is there any wonder?
It is well known that Small Business is resposnsible for most jobs in the USA; Thus, this tax burden hurts the prospective employee as well as the employer. Here of late I have heard the media hawking the prospect that Phila. is on its way to being one of the "key cities" to watch. This will only be a pipe dream unless City Council has the vision and foresight to remedy this unfair burden.
Dentist: BPT Bites I've been a dentist and I have had my practice and home in the city for 20 years. I love this city. I recently became involved in a business that is opening operations in six states currently and more to come. Nobody chases business away like Philadelphia does with taxes. I cannot from a fiscally responisible position permit any of our operations to be set up in Philadelphia because of the completely unfavorable tax positions. What a shame.....it dissapoints me greatly and I just flat out don't understand the simple logic that will work. Capital goes where its treated well.....its just that simple. We are about to invite lots and lots of new residents into our city for a chance to live in a thriving downtown in brand new condos being built aruond the city that is becoming rich in culture and restaurants and night life. How hard is it to realize that we need the tax structures to bring the businesses in with them.
News Ignores The BPT's Effect On The Little Guy What’s interesting about the Daily News story is it completely leaves out the harm the BPT does to REALLY small sole proprietors like myself – people who might earn a whopping $30K a year. Fuhgeddabout those firms with millions in gross – so many make much less than that and it pinches us even more proportionately.
Will We Lose This Future Vet? I am a veterinary student at UPenn who will be graduating in 1.5 years, and have been almost a life-long resident of Philadelphia. It was my dream to open up a small practice in this city after I graduate, but after even a brief look at the numbers, I know that it would be foolish of me to consider it given the current tax structure. Why would I pay a Business Privilege Tax AND a wage tax with the same salary in this city when I can go to KOP or Bala Cynwyd and do much better? It is a shame.... I am like so many potential small business owners who realize it is not a smart business decision to create jobs in Philly given the current tax situation.
So, in May 2007 I will graduate, and like many others, will have to leave MY city, the city I grew up in, in order to make a better living. What a shame. I can only imagine that if I cannot make it work here, how many THOUSANDS of people and jobs are lost from this city each year. The unrealized potential is staggering, as these are many people who never even consider coming here, let alone the ones who leave.
The BPT Taxes Pass-Throughs (Except For Lawyers!) Architects routinely hire sub-consultants (engineers, specialty consultants) to work on projects. As we collect our invoices, which include consultant services, we pass through their money to them. Under BPT, we are taxed for this pass-through income. There is one specific exemption: lawyers who must hire other lawyers to provide specialty consulting services are exempt from being taxed on the pass-through income.
This Washintonian Will Be Staying In DC I am a freelance web consultant and was considering a move to Philadelphia from Washington, DC. When I received my relocation packet from a Philadelphia-based real estate agent, the packet included a Tax Information sheet and I could hardly believe my eyes when I started to read it.
I am self-employed, and the flexibility that gives me is a big part of the reason I am able to consider relocating. When I saw all the taxes I would be subject to in Philly as a self-employed worker, I immediately fired off an email to my Philadelphia-based realtor in which I told him how stunned I was, and that it was an absolute deal-breaker for me. Whereas in DC, I am subject to one and only one tax, in Philly, I would file for up to four different taxes. As I type this, I still can't quite believe it. Even if the higher costs were not a factor, the extra paperwork alone is an enormous deterrant. In DC, I do my own taxes; in Philly, there's no way I would get by without a tax advisor. I would have to incorporate and hire a tax advisor, which means more paperwork, more fees, and less time to spend on marketing a business that ultimately would have drawn income from clients located around the USA and spent it on goods and services in Philadelphia. I should get to tax Philly for providing the city with that income!
New Arrival Sees Philadelphia Taxes For The Barrier To Growth They Are I was just transfered to Philadelphia by my company from Chicago. I was very shocked to hear about the wage tax and the 2% transfer tax! Coming from the 3rd largest city in the nation to the 5th - I realize cities need funding - but these types of taxes are probably keeping many more young, urban professionals from living here which in turn, impacts real estate and commercial development. Philly has a long way to go to catch up with Chicago's standards and I'm truly hoping that these taxes will soon be abolished for more realistic choices. I want to see Philly become what Chicago is now - a great place to live and work - not just for the very wealthy. I have spoken with many people in my field who puposely live in the suburbs because of these taxes.
The BPT Chases Another Firm Out Of Philadelphia In 2003, my partner and I turned a dusty shuttered shop front on Emlen St. into a viable small restaurant, doing much of the construction ourselves, in just 4 months and with only $78K. We turned a profit in our first and second years, no small feat for a restaurant. Our operational costs, including food costs, averaged 38%, which is pretty impressive, given that chains would like to do that well. We employed 8 local workers, all living in Ms. Reed Miller's district, for most of last year. Now they're all jobless. This is a SHAME!
Why did we close our doors and put the place on the market? Philly business permits, fees and taxes! We figured out that Philadelphia extorted the equilvalent of 50% of our profit after expenses in taxes. How anyone running a SMALL business can stay open in this town is beyond us. After we paid L&I and the Health Dept. a small fortune just to open, we were hit with the Wage tax, the Occupancy tax, which you must know is paid by the business tenants and not the landlords, and the arrogant Business Privilege taxes - well, it was too much to support so we closed. It's NO priviledge to do business in Philadelphia.
Now, there are 9 unemployed people including myself in Mt. Airy and the 7100 block of Emlen St. 19119 is practically deserted. So inviting to criminals that the only viable business on the block, the Korean-owned cleaners, was robbed recently. We're trying to sell our business, which was successful from day one, a great addition to that commercial block, and a great loss to the community (ask them, don't take my word for it). And what did the City do to help us? Just stood right outside our door, with a hand out, grabbing its share first.
I will NEVER own or operate a business in this City again....We're looking in the counties right now.
Like Father, Like Son? I run a small electrical business with two employs. This is my fourth year of business in the city since I broke away from my father’s Co.. After getting my BPT from my accountant in the mail this morning I now know why my father choose to move his business out of the city. It makes me want to leave the city. I love life in the city but can’t justify the high taxation.
That Philadelphian Is Outta Here! I have lived in other cities that have done well without the large taxes Philadelphia places on business and citizens. People love the city, I have lived here for three years, but when the tax abatement on my home expires, I will have to leave. My business and personal life cannot survive here.
City Taxes Chase Another Firm To The Burbs The firm that I work for recently relocated from center city to Conshohocken. I miss the city terribly and know that if the BPT and the wage taxes were elimated, Philadelphia would reep huge benefits. The two blaring barriers to entry for businesses trying to enter the Philadelphia marketplace are the BPT and the Wage Tax.
She Feels Silly For Not Moving To the Suburbs I work at home as a consultant so that I can spend more time with my children. I love the City and never want to leave it. But, every year, when I get hit hard by the BPT tax and have to come up with over 6 percent of my earnings to pay to the City's Revenue Department, I feel silly for not moving to the suburbs. The BPT tax treats me, a self employed individual, like a multi-national corporation. Why should I pay more than other individuals do who pay a wage tax? Please recognize that Philadelphia cannot attract and keep young families if it continues to perpetuate this outmoded, regressive, small business-killing tax.
Say Good-Bye To One More Resident...Thanks to the BPT A co-worker of mine who is increasingly doing private consulting work has just decided to move out of Philadelphia in order to avoid paying the Business Privelege Tax. He may work for Philadelphia firms but he won't live here because it would cost him money. We are chasing away those who have skills to bring to our city and who are thriving in the knowldge economy. They don't want to work here, and they certainly don't want to live here. If we can get rid of the job-killing Business Privilege Tax, we can grow jobs in Philadelphia. WE seem to have money to give huge tax breaks to companies to stay in big buidlings in Center City (even though most of their executives live in the suburbs!) but we can't find a way to help small businesses in the city that are frequently those owned and managed by city residents?
Another Is On The Fence...Will Taxes Make The Difference? I have considered moving out of downtown Philadelphia for a couple of reasons. One, I have recently take a new position at XXXX, which requires a pretty long commute. And more importantly, I cannot seem to justify the additional cost of living the city wage tax places on my household. Between city wage tax (over $5000/year), property tax (over $4500/year) and the increased cost for car insurance and parking, the cost of living in Philadelphia is exorbitant. The sad point is that I love living in the city and more people with the economic means to facilitate the continued rejuvenation of the city would move to Philadelphia if the wage tax was adjusted quickly and sufficiently. Although I understand this would be lost revenue to the city, the upside of people and businesses actually CLAIMING they are based in the city would offset the downside of lost percents. As many of us know, there are hundreds and perhaps thousands of people and businesses not claiming Philadelphia residency in order to escape the outrageous tax laws. Additionally, it seems so incongruous that the large population of low to poor population in the Philadelphia metro area are being affected by an outdated tax law.
Taxes Keep Another Firm In The 'Burbs That Would Otherwise Move In Just a small example of how the City's tax system is destructive. My employer's offices are in Radnor. I live in the City, and would love to work in the city too. In a conversation with the owner, I found out why he is reluctant to move his business into the city: taxes. His small business can't afford to pay the wage tax, plus the gross receipts tax, plus the business privilege tax. He loves the city, would be happy to be in a location more convenient to transportation, and in a 'bustling' urban environment. But the tax burden imposed by the City are keeping this small professional consulting firm out of Philadelphia. I can't blame him.
Job-Killing Business Privilege Tax Threatens A New Business And A Few More Jobs I have been exploring starting a new business, but the BPT is a killer. So is the zoning process; I suspect that initial variance applications are automatically denied for the purpose of generating additional revenue from appeal filing fees.
A friend of mine who is a financial planner advised me to move out of the city completely and start my business in the suburbs. It would be a shame if it came down to that.
Philadelphia Taxes Stun New Arrival I'm 32 and single and recently moved to Philadelphia from Boston with my company. I am a Territory Manager covering the PA Region. I like your city, in fact, many of my friends that have visited me from Boston have said It's a hidden gem, they never thought it was such a nice place to visit.
When I heard about the City Wage Tax, I was very disappointed, I never paid that in Boston, it's a silly tax that had me considering moving to the burbs but I'm a single guy and figured I would be bored living there. Why am I being penalized for living in your City, it's crazy?
Recently I started looking for a property as I figured I would be here for at least 2 years. I found a great place in Rittenhouse, a multi-family, needs a little work but an investment and I was looking forward to a new project. Then my realtor hands me the estimated closing costs and I find out there is a transfer-tax, I honestly thought he was making a mistake. This Multi family, that costs $400K will cost me 2% or $8,000 to buy. How long do you think it takes to make/save that kind of money, a long, long time. If I stay here for two years and sell this place, I pay another $8K or more depending on sales price plus real estate fees! There is no way this property is now worth buying. I could never make that money back and it is cheaper for me to rent at $1,250 a month. What are you people thinking!? It's so silly and counter productive to the type of investment your city needs.
I called a friend of mine who develops property in Boston and he too thought this was strange and said at the most they might pay 0.5% on a property in Boston over a certain dollar amount. Hence you see the rapid development of Inner City Boston as opposed to boarded up shantys that you can find in Philly for $7,000. I wondered why Philadelphia was the red headed stepchild of Boston and New York. Especially as the US Democracy originated here and Philadelphia was once a mecca for Industry and Manufacturing.
Now I see why. My Solution. I have spoken to my Manager and put in for a transfer back to Boston so I can cover the territory from there. I wonder how many people do not even move to Philadelphia because of these reasons.
Philadelphia Taxes Help Chase Another Resident To The Suburbs My wife and I bought a house up in Newtown, the town where I grew up. We thought about buying in Queen Village where we now reside, but the poor public school choices in that area coupled with the ridiculous wage tax and other taxes like the business privilege tax (I do some consulting on the side) helped to push us out.
Why Are We Still In Business In Philadelphia? Let me tell you about our company. We are a nationally known wine cellar design/builders for over 25 years. We work all over the U.S., most of business comes from out of the city (98%) & of that 75% is out of state. I have been raised in the city (Northeast) & have owned property in Bella Vista for the past 20 + years. I am a city person who loves the city. I also own a company in Camden, NJ. that does wine storage in a warehouse setting. Last year a city employee asked my partner why do we keep the city company here & why not move it to Camden. And people wonder why the city is losing businesses. Oh, by the way as I type this my lawyer & accountant are moving my business to Camden. Another one bits the dust, or in this case just saves tax money.
Real Estate Taxes Are Unfair I am a CPA and a Philly resident in the Far Northeast. Last year I handled the sale of a property in Philadelphia's Fairmount section as part of my aunt's estate. We sold the property to XXXXXXXX. The property, according to the City's property tax change notice, was worth about $126K (up substantially from the prior year's market value of about $86K). We sold the property for $250K. The timing of the sale was such that when the mail was forwarded, I received the current year's actual tax bill. I sent it back to the City with a note that said we had sold the property and told them who the new owner was. I specifically made a point of telling them what we sold the property for so that they could potentially adjust the property tax bill accordingly. It seems reasonable that the more your property is worth, the more you pay in property taxes, right?
The Wage Tax Costs Us Another Resident I am for the reduction of the city wage tax. I recently moved to Philly and refuse to move into the city to pay a joy of living in the city tax. I am 30 y/o and make over $100 grand per year. I would consider moving into the city/buying if the tax structure was more far.
They Laugh At Us Because Of Our Taxes I can remember when I was in the State Police Academy in Hershey PA, and every payday the cadets from other parts of PA would laugh at the cadets from Philadelphia because our pay checks would be around $50.00 to $60.00 less than theirs due to the City Wage Tax. They would ask us, "What do you get for that?" and to this day I still can't tell them.