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Council Democrats Seal the Deal with Philly's 1%
Yesterday, Council repealed the wage tax rebate for the working poor. This landmark legislation, one of the signature achievements of the late Councilman David Cohen, was repealed by a 10-6 vote, with 8 of those repealing votes coming from Democrats. Voting in favor of repeal were the following:
Clarke D-5th District
Green D-At Large
Greenlee D-At Large
Henon D-6th District
Jones D-4th District
Kenney D-At Large
O’Neill R-10th District
Oh R-At Large
Tasco D-9th District
Voting against repeal were the following, including only 5 Democrats:
Bass D-8th District
Blackwell D-3rd District
Goode D-At Large
Johnson D-2nd District
O’Brien R-At Large
Squilla D-1st District
Generally I try not to engage in single-issue rating of politicians. But this is going to be a hard pill to swallow when it’s time to vote for the repealers again. The wage tax credit is the kind of tax provision that generally marks the divide between Democrats and Republicans. It’s targeted toward the working poor so only those that need it get it. Credit recipients recycle the money to the economy by spending it locally, rather than on overseas vacations, or by depositing it in offshore accounts. The City gains by enabling economically marginal families to pay their rent and utilities, thus keeping families intact and lowering pressure on local services.
So Democrats, the alleged Party of the working class should like this kind of tax break. It follows the same policy guidelines that the President articulates when he argues against continuation of the Bush tax cuts for the rich. It provides some slight progressivity to the local wage tax that is otherwise structured about as regressively as one can imagine. The wage tax looks like a flat tax but is really heavily skewed to benefit the rich, even more so than the federal tax code after the Bush tax cuts. The U.S. income tax is still progressive in that higher income people pay at a higher rate. The wage tax, on the other hand is levied at higher rates on poor people because it only applies to wages; capital gain and dividend income is excluded entirely. In addition, higher income people deduct it against their federal income tax, enabling them to write off as much as 35% of it. In sum it is the kind of tax that Democrats should be rushing to fix. But not most Democrats on this City Council.
This is going to get even harder to take next year when the supposedly Democratic Mayor of our town will be proposing, and this same Council will probably be enacting, an across the board cut to the wage tax. That approach mirrors the exact approach of George Bush in cutting taxes in 2001. On the surface you can say it’s fair, because it’s cutting everyone’s taxes by the same percentage. But in reality it will grossly favor the rich. Comcast execs taking down half a million will get 20 times the tax break of a janitor in the Comcast building earning $25,000. Even Warren Buffett wouldn’t excuse that. But it seems that a majority of Council like it.
Of course millionaires can give campaign contributions to Democrats and Republicans alike. The only price is one’s soul. 8 Democrats seem to be working hard on that deal right now.