Philadelphia Has A Plan To Fix What's Wrong With Its Tax Structure
(Visit http://www.philadelphiataxreform.org to view the official website of the Tax Reform Commission, and the Commission's three-volume final report)
The people voted for it! 80% of Philadelphia's voters approved creation of a Tax Reform Commission to draft a reform plan.
The taxpayers paid for it! The Commission spent $500,000 of city money and almost a year to draft a blueprint for change — complete with a way to pay for it.
The time for study is over. The time for action is now.
Key Recommendations of the Tax Reform Commission
- Reduce, reform, and finally eliminate the Business Privilege Tax by 2014.
- Reduce the Wage Tax rate to 3.25% for both residents and nonresidents by 2014.
- Restructure, simplify, and improve the real estate assessment process.
- Create a Taxpayer’s Advocate to represent property owners in assessment appeals.
- Implement safeguards against large, unexpected property tax increases.
- Phase in land-value taxation to encourage property improvements and discourage blight.
- Adopt a budget-based real estate tax system to ensure that the City collects only the taxes it needs to provide valuable and essential services to residents.
- Invest at least $1 million in the Greater Philadelphia Urban Affairs Coalition’s Campaign for Working Families, to help return up to $150 million in annual federal and state tax credits that currently are not received by eligible low-income Philadelphians.
The Tax Reform Commission’s package will:
- Dramatically reduce the Wage Tax
- Eliminate the Business Privilege Tax
- Ensure that Real Estate Taxes are understandable and fair
- Create jobs and increase investment in every neighborhood
The Tax Reform Commission’s package will not:
- Reduce Crucial City Services
How do we pay for tax reform?
Some of the Commission’s recommendations to make the tax reform package fiscally responsible include:
- Generate additional tax revenues from job and tax-base growth.
- Collect delinquent taxes from those who currently do not pay.
- Initiate a tax amnesty program to collect back taxes.
- Analyze and increase the City’s Fine and Fee Structure to discourage violation of the law and ensure that fee revenues cover the cost of the services they are intended to fund.
- Expand efforts to achieve efficiency in all city departments.
A Message to Philadelphia’s Taxpayers
The Philadelphia Tax Reform Commission was created by a vote of nearly 170,000 citizens to “recommend methods to reduce the taxes of Philadelphia residents, workers and businesses.” The Commission voted 14-to-1 for a comprehensive overhaul of the city’s tax structure and released a three-volume, 500-page report.
The Tax Reform Commission’s study of the City’s tax system demonstrates that, as a city, we tax what others do not; our taxes are too high; and our taxes are unfairly imposed. The Commission also found that Philadelphia compounds the problems of a high overall tax burden by relying too heavily on wage and business taxes, the taxes that are most likely to drive residents, businesses, and jobs from the city. The city’s incomparably high wage and business tax rates have damaged Philadelphia’s economy over the past three decades, ultimately reducing tax revenue and the ability of the City and School District of Philadelphia to finance services.
The Commission's tax reform recommendations provide the City with a 10-year plan for fundamentally reforming its tax system. To regain its competitive edge, the City needs to abandon its historic piecemeal approach to tax reform and adopt comprehensive tax reform.