As sad as I am that Irv lost last May, I am proportionately that happy that Maria is in City Council advocating for her district and all the people in this city who keep being left behind as this city's rising tide lifts only some boats.
City Council signaled yesterday that Mayor Nutter would have a difficult time deep-sixing already approved wage-tax cuts for the working poor to help pay for his proposed business-tax cuts.
At least five Council members said in a budget hearing yesterday that they flat-out opposed or were deeply skeptical of calls to eliminate the so-called David Cohen tax credit, which was championed by the former city councilman, who died two years ago.
"With an acknowledged rate of 25 percent of our citizens in poverty, I'm not satisfied that we're presenting a budget where we are more aggressive on our business-tax cuts," said Councilwoman Maria Quiñones Sanchez.
So far, the budget is good in many ways, and generally restrained. But that doesn't mean that criticism should be muted if it is due. Stan has been prescient on this:
Cohen's low-income tax credit isn't slated to go into effect until 2013, and its impact on the city's current five-year plan - the subject of yesterday's hearing - is minimal. But after the tax credit has been phased in, it will cost the city about $80.8 million in 2016, and the annual cost will continue to go up.
"It starts to take off and become a very sizable cost," said Steve Agostini, the Nutter administration's budget director. "You know, if folks want to . . . debate that, that's entirely legitimate, but we just want them to understand there's a price tag associated with it."
The administration's view is that its broader plan for wage-tax relief will benefit lower-income residents, in addition to other taxpayers. The city's wage tax was at 4.96 percent when the Cohen tax credit was adopted. Scheduled reductions to the tax rate and statewide casino revenue are expected to lower that rate to 3.11 percent by 2013.
Council members asked whether it would be possible to slow the city's scheduled wage-tax reduction rate in order to fund the tax credit for the working poor. Nutter's representatives acknowledged that was possible.
And I think priorities are a valid subject for debate and criticism.
Plus Goode, Greenlee and Jones
Great to hear from Maria on this, and according to the DN blog, she was joined by Goode, Greenlee, and Curtis Jones.
If you want to argue, as some do, that focusing on what amounts to a very small a wage tax cut for the poor is the wrong priority (versus spending the money on job creation, etc), I think there is a valid argument...
That said, thank goodness someone is pointing out that that we are cutting business taxes, while "un-progressivizing" Philly's wage tax, is really a pretty odd way to start off an administration. I would certainly much prefer a slowing to the wage tax (which will already be lowered by the glorious casinos).
As an aside, concerns about some of the things that have come out about his campaign and improper spending side, so far Curtis Jones has held hearings on foreclosures, advocated for more citizen input on the budget, and been with Maria here. Like Bill Green, I think it is a pretty promising start.
Them too!
sorry, guys, for sidelining you: it was just a great quote.
I'm another one who would be
I'm another one who would be interested in a more substantive discussion of this. In theory a more progressive wage tax - scratch that a change of state law to allow an actual local income tax attached to state income taxes - sounds just dandy and fairer to me. The problem with the Cohen tax-credit scheme as its been laid out to me is that the employer withholds the entire wage tax anyway and then its upon the low-income wage earner to apply for the credit. In other words it sort of requires a minimum-wage earner to be a tax accountant in order to actually gain the benefit of the bill. As such, at least as its been described to me, most of this battle is really about budgeting requirements for the 5-year plan (Nutter as mayor as opposed Nutter as councilman) versus philosophical positioning (the people listed above) and that in reality only a very small number of the people eligible to receive this credit are likely to follow through and claim it.
Most discussion of this part of the provision has been lacking on information on the details of implementation on the provision i.e. how you actually claim the credit as well as on where each side is getting their estimates for likely participation in the program.
If anybody can expand a little on the "how" of the tax credit works, I think I might have an easier time evaluating the current controversy.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.
A question
What is the current schedule for the Cohen low-income wage tax cuts? I've done a cursory search but can't find the numbers.
It cuts the wage tax by 1/2% a year until it's down to 1.5%
Starting Jan 2012 those who are 100% eligible will get a 1/2% cut from whatever the general wage tax rate is at that time. So if the general rate is 3.8%, they will pay 3.3 in 2012%. They get another 1/2% off every year after that until their rate hits 1.5%. The 1.5% floor is there because that amount is guaranteed to pay off the PICA bonds that were floated in the early nineties to bail the City out of its near bankruptcy.
Wage earners in a family of four earning about $35,000 a year would get the full cut. It will then decline gradually for people earning more. I'll try to post more specific numbers later.
good stuff!
There's so much skepticism out there about whether business tax cuts really do anything, but there's very little skepticism about the fact that money in the pocket helps people. I'm glad people are standing up and saying it and a few more spendable dollars should help our businesses. Of course, some of the workers who will benefit will go home to the suburbs, but how much of Rite Aid or CVS's profits stay here, either?
I'd rather do something we know would help people.
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This Too Will Pass, treating grave matters lightly and light matters gravely, since 2001.
Poll:
are my baseball metaphors mixed?
Yes, but not for the reason you think
"Comes out swinging" is actually a boxing metaphor.
Haha
lucky we have a couple English professors on hand.
Always
happy to help. :)
Alternates
"With the administration pitching cuts for business, Maria Quinones Sanchez is at bat for everyone else"
"The administration comes out swinging for business, Maria Quinones Sanchez is in the corner for everyone else"
Comes out singing is an opera metaphor.
Comes out singing is an opera metaphor. Sorry, couldn't resist.
Age of users?
Is this youth blog website or just young adults from 19-26?
see upper left corner
"Are you a progressive, young (or young at heart) person with something to say about the City, the Region, or the State?"
And that's as specific as we're ever gonna get.
I am 30.
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This Too Will Pass, treating grave matters lightly and light matters gravely, since 2001.