February 1–8, 2001

hall monitor

Wage Against the Machine

Hoping to find "a tax structure that encourages smart growth," the City Controller’s Office plans to undertake a comprehensive analysis of the city’s taxes on individuals and businesses, according to the recently released Economic and Financial Report.

The City Controller’s Office hopes to design a tax structure for Philadelphia that gives both residents and business owners adequate incentive to move into or remain in the city. Among the issues to be examined are the city’s expenditures in relation to its revenue, real estate taxes and TIFs (tax increment financing) and, principally, the hated wage tax.

Though the specific details of the re-evaluated and improved tax structure still await development, Tony Radwanski, assistant to the City Controller, is pleased to have recently acquired assistance from both the Chamber of Commerce and the Center City District. Radwanski noted that among the tax issues under scrutiny, Philadelphia’s lofty wage tax demands immediate reform and that ultimately an exacting, comprehensive analysis is the only effective way to begin structuring solutions.

According to Senior Vice President John Mahoney, the Chamber of Commerce will pay close attention to real estate tax reform and its impact on education. But the Chamber’s primary focus, he says, will be the wage tax, which affects the organization’s suburb-dwelling members as well as city residents.

Mahoney says he is anxious to join forces with the Office of the City Controller in order to get started with the process, and to further study "the problems [with Philadelphia’s current tax structure], and develop innovative ways to solve them without creating a huge deficit in the process."

Mayor Street spent little time on tax reform in his Jan. 23 budget address, but he noted that "lower taxes, conservative budgeting, smart spending and a healthy economy are significant components of our vision for a better Philadelphia." Street is carrying on former Mayor Ed Rendell’s practice of reducing the wage tax in tiny increments; the next proposed cut, from 4.5635 percent to 4.5385 percent, would save the average Philadelphian about $10 to $15 per year.

The City Controller’s Office plans to release the results of its study in the fall.

—Senna Waldo