Magazine article Government Finance Review

Commission Recommends Overhaul of Philadelphia Tax System

Magazine article Government Finance Review

Commission Recommends Overhaul of Philadelphia Tax System

Article excerpt

The Philadelphia Tax Reform Commission has proposed a comprehensive over haul of the city's tax structure with the aim of improving Philadelphia's competitiveness in attracting and retaining residents, businesses, and jobs. The Commission, which was created by a citizen vote, believes reform is necessary for the economic recovery and prosperity of Philadelphia and the surrounding region. Twenty-eight recommendations for reform highlight the Commission's final report, which was released late last year.

"The core of our recommendations is to move relentlessly forward in revising our tax system and reducing particular taxes that have made us uncompetitive as a city," said Commission Chair Edward Schwartz in a news release. "We believe these reductions and reforms undertaken over time will begin to make us more competitive and will begin to help the city redeem and reclaim the population, perhaps, that we have lost."

Citing statistics from a number of sources, the report concludes that Philadelphia's tax rates are too high, that it relies too heavily on business and personal income taxes, and that its property assessments are inaccurate and regressive. Taxes on personal and business income, which are the most likely to drive residents and businesses from the city, account for an unusually large percentage (33 percent and 12 percent, respectively) of total tax revenue compared to other large U.S. cities.

The property tax, which accounts for 40 percent of the tax revenue in U.S. cities with more than 300,000 residents, comprises just 19 percent of Philadelphia's tax revenue. …

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