The Embarassingly Out-Of-Touch Inquirer Editorial Board

In an Inquirer editorial yesterday scolding City Council for taking a second look at tax cuts, the Inky editorial board showed how embarrassingly out of touch they are with everyday Philadelphians.

First, in a nutshell, the Inquirer wrote an editorial that demanded that- fiscal realities be damned- the City better keep cutting business taxes. The editorial was kind of high-comedy.

First, here is the background though: reading between the lines, the City budget is in very bad shape, much worse than projected in Nutter's first budget proposal. The pension bond issue isn't happening, transfer tax revenues aren't coming in, and the City is faced with a basic reality: in a shrinking economy, its pretty hard to cut taxes and not cut services. So, that is the context of this editorial (and the closed door budget sessions for Nutter).

The funny thing is that the editorial doesn't particularly make logical sense. It simply wants to have it both ways. For example, there are passages like this:

It's time for the heavy lifting that's missing in the Nutter administration's first stab at the budget. With good reason, the $4 billion budget was described as crowd-pleasing. It proposed smart new investments that should be retained in some form - for police and fire protection, parks, the community college, and more.

Cool, smart new investments, great! (Which means increased spending...) But, of course, it also says things like this:

But now that the economy is faltering, there is some talk at City Hall of halting the tax cuts. That's the worst message Mayor Nutter and City Council could send to workers, businesses and residents.

Ending the meager wage- and business-tax cuts already on the books - as well as failing to push ahead with the business cuts proposed by the mayor - would signal that the city is headed in the wrong direction.

Instead, Nutter and Council need to take a hard look at the spending side of the ledger.

The paper even acknowledges that Nutter is already cutting spending 3 to 5 percent across City budgets, says we need to spend more in certain areas, then simply demands Nutter figure it out with increased 'efficiencies.' What efficiencies are they talking about? The efficiencies of taking back the money we were going to spend on Fairmount Park? Laying off some social workers? The editorial board doesn't say.

Since we are not in la-la land, and each city department is already cutting 3 to 5 percent from their spending, the blunt reality is that these savings can come from one thing: service cuts. (The Ed. Board is also clearly getting ready to go after the Unions in negotiations, so get ready for that when it happens. But that isn't now, so, the cuts couldn't even in theory come from attacking city workers.)

So, after I read the editorial, I sat here wondering if there is any way I could see how the Inquirer's priorities measure up against actual people in the City of Philadelphia. So, using these new fangled internets, and a search engine thingamabob, I used the google, and typed in "Philadelphia Priorities."

Well I'll Be A Monkeys Uncle! The very first thing that came up on the google is an actual poll by the Economy League of Philadelphia (funded by those communists at the Chamber of Commerce)- that asks Philadelphians about their priorities. And, it even specifically talks about what Philadelphians think about the debate over taxes verses services.

Shiver my timbers, look at what the heading says:

Taxes and Spending: Most Unwilling to Reduce Services to Cut Taxes

Most Philadelphians would favor maintaining the current level of taxes and services in the city, but more than one third would prefer “more city services, even if that meant taxes would have to be raised.” Only 10 percent would prefer “lower taxes, even if that meant city services would have to be cut.”

Surely that must be an error, so I looked a little deeper at the numbers:

If you had to choose, which of the following would you favor:

  • More city services, even if that meant taxes would have to be raised: 38%
  • Lower taxes, even if that meant city services would have to be cut: 10%
  • Maintaining the current level of taxes and services: 45%
  • Unsure/No Answer: 7%

Great Caesar's Ghost! In other words, almost 4 times as many Philadelphians would rather see taxes raised for more services, than cut for less. And, by a margin of 83% to 10%, Philadelphians would prefer at minimum to keep current taxes while not cutting services.

And since business tax cuts are all the rage, it would have been even crazier if the people were asked specifically about business taxes... Heavens To Betsy!, they were asked that too:

If Philadelphia taxes were to be cut, almost equal numbers would like to see the wage tax and the real estate tax cut; few would cut the taxes on businesses. If taxes had to be raised, however, a majority would prefer the taxes on businesses be raised. This is true of Democrats, Republicans, and Independents alike.

So, the Inquirer Editorial board is bizarrely out of touch with the overwhelming majority of Philadelphians? And, for that, they are attacking City Council for apparently having some common sense?

Goodnight Irene!

Good stuff!

My worst fear about the Nutter administration was that it really would pursue the agenda that the Inquirer is calling for here. Full speed ahead on BPT cuts and damn the torpedoes! Since Nutter's not, that's very encouraging.

This was a really solid way to debunk the Inqy analysis, Dan. I just don't believe that the world would change dramatically if we plowed ahead on these tax cuts. I think the economic stimulus our city needs is a ton of work on its basic infrastructure. That would employ people, beautify, make things more efficient and pump money into the economy.

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This Too Will Pass, for the guts in your cerebrum.

City Council, not Nutter

So far, the only skepticism on tax cuts I have heard is from Council, not the Mayor. The most recent budget meetings were held behind closed doors, so we don't really know what the administration is thinking.

Oh, shoot...

I sort of had the impression that the Mayor had kind of chilled out for this go around, but I don't really know where I got that from. If I'm wrong, then that kind of stinks.

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This Too Will Pass, for the guts in your cerebrum.

It would be smart if he did

Some kind of compromise solution -- say, reinstatement of the lower-income wage tax cuts, and a slower rate of reduction for the BPT -- would prevent draconian service cuts and offer each of the stakeholders a victory.

I don't believe that anyone but the very hardline antitax advocates would hold it against Nutter for being forced to compromise, and Nutter could go a long way towards distinguishing himself from John Street, who was as stiff-necked against tax cuts as the Inquirer's exhorting the mayor and council to be stiff-necked for them. As long as there is a continued emphasis on making Philadelphia a better place to do business, from better services to reduced taxes, the businesses will continue to come.

Nutter could also use the compromise to extract a range of concessions on legislation, programs, etc. that would make his first term go swimmingly with council and also help him to get a lot done. Ultimately, either a budget showdown, service cuts, or even a lag in new, meaningful programs (like recycling, police hiring, etc.) hurt the Mayor's ability to show that he's presiding over a Philadelphia Renaissance.

The Pro BPT Coalition...

Isn't most of the pro-BPT vitriol coming from Stan Shapiro? I mean, shouldn't there be a complete, pardon the term... "progressive", corporate income tax on all businesses who operate within Philadelphia? I've read Stan making the extremely bizarre argument that we're not taxing businesses enough in Philadelphia. That's seems great, since we all know businesses are completely tied down to Philadelphia and cannot relocate to other places on the globe which are more viable.

Oh, wait...

So anyway, I think I'm going to have to side with Mr. Rizzo, who prompted a question recently when this subject was raised... "what have you done to generate jobs in the city [under the existing tax structure]?"

Former mayor Rendell has often mentioned how idiotic the scenario is, where there has been growth just millimeters outside the taxing jurisdiction, with the high rises and office parks that form a beltway around the city's borders from Bala-Cynwyd, through Consohocken, and now recently Horsham, and Trevose/Neshaminy.

If anything, I would be scrambling for a way to fix the business taxing structure ASAP and resell ourselves to corporate America as a "sustainable" city for growth and efficiency and as a way to avoid those pesky fuel costs by moving into the city for our amenities and our complete public transit network which most cities lack.

You're right about my vitriol, but wrong about my ideas

on what to do about the BPT. The vitriol comes from fighting a one-note corporate voice that has most of the microphones and insists that across the board BPT cuts will cure cancer. It's that voice, not mine, that is one note. I have never suggested that "we're not taxing businesses enough in Philadelphia" and completely support a "progressive corporate income tax on all businesses who operate in Philadelphia." When have you ever heard the corporate press support that idea? Never, because that wouldn't help its big biz members. They want the rates to go down for Comcast and for the neighborhood dry-cleaner the same amount.

It's small business that generates most of the jobs in Philly, but you'd never know it by looking at how taxes are structured in this City.

Tax cuts are not always illegitimate, especially if they're done in a way that makes taxes progressive; that's why I support the scheduled changes to the wage tax to cut it sharply for low wage workers. That's another idea the corporate press, including the so-called "People Paper" Daily News, has never endorsed.

There are a number of ideas for progressive taxation of Philadelphia business floating around Council that are worthy of support. Intelligent, well-meaning people are working hard on them. Unfortunately, the Philadelphia Inquirer and its ilk could care less.

And here's a little other news that you won't find in the Inquirer. Many of the businesses that would be most helped by the mayor's proposed BPT cut aren't located in Philadelphia. That's right, they're not here. They pay the gross receipts portion of the BPT because they sell stuff into the City. They pay no net income tax, but they pay on revenue from their sales. Companies like Ford, Coors, Apple, Exxon, etc., either are or should be paying that tax. They will not move into the City if it's abolished. But if services are not improved in this City with the taxes that they and other companies pay, we may all move out.

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