- Pennsylvania Among 'Terrible 10' Most Regressive Tax States
- February 4 Non-Partisan Training: HOW TO RUN FOR ELECTION BOARD IN 2013: HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Republican Governors Opt-In to Medicaid Expansion
- The Reports of Unions' Death Are Greatly Exaggerated
- Ask Allyson Schwartz to run for Governor
- Mind the gap: Opting Out of Medicaid Expansion Leaves Low-income Families Behind
- Jan. 14 Workshop:HOW TO RUN FOR ELECTION BOARD IN 2013; HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Seth Williams on Guns, Jasmine Rivera on School Closures @PFC Meetup Wednesday
- PA Revenue Strong Midway Through Year; Tax Cut Could Have Big Impact
- What to Make of the Fiscal Cliff Deal?
Small Businesses, and their Savior: Cutting Business Taxes
Remember this sheet?
It shows the amount of Philadelphia business taxes paid by business size. We have talked about it a lot. Just as a reminder, it shows that for taxpaying businesses, the average amount paid in the gross receipts tax by businesses taking in less than 100k for 2006 is a whopping $54. The average amount for businesses taking in between 100k and 500k is $435. That doesn’t seem like a ton of money, right? Yet from every news story, editorial, and blast from the Chamber of Commerce, Philly Forward and others came the idea that this tax was the invention of Satan himself. Why so evil? You have to pay it whether or not you earned a profit or not. (Remember this point, please.)
As Stan has pointed out, the devlish GRT actually does some good stuff. While we always hear the tiny, Lucifer-like GRT forces businesses to move outside of the city, it turns out the incorrigible tax already hits businesses outside of the city for any business they do inside of it. So, if Exxon-Mobil, or Coca-Cola does business in the city (which they do), then they actually pay the tax. So, unless you think that eliminating the troll-ish GRT will make Coca-Cola run to set up shop in Philly, then getting rid of it might be sort of dumb. In effect, we are disarming and giving up money for businesses outside of the city. So in response, the Coalition for Essential Services made a proposal that would increase the GRT, then exempt the first 500k for all businesses, effectively making taxes more progressive in the city.
Now, let’s contrast that proposal with what is actually happening in our city, where taxes are actually becoming more regressive. We spent years lowering business taxes, with the idea that this would be sooooo great for small businesses. And yet, what did we learn from the city?
Philadelphia's free trash-collection service for small businesses will come to an abrupt end July 1, when merchants will be forced to pay $500 a year for the privilege or else hire private garbage-haulers.
Letters notifying business owners of the fee began arriving this week, taking many by surprise.
"It came like a slap to the face. Businesses are scratching and clawing to stay open, and you're putting another $500 on top of that?" said Rita deVecchis, owner of a South Street framing shop.
Although the fee was mentioned in Mayor Nutter's March budget address and passed by City Council as part of last month's budget accord, the $500 fee was largely overshadowed by the budget debate over property and sales taxes.
The fee will be levied on about 15,000 small businesses, and could raise more than $7 million a year for the city, said Deputy Streets Commissioner Carlton Williams.
Ooops. That is right. IF you are a small business, you may a few bucks less in taxes... but you will instead pay for your services, in the form of a $500 flat fee for trash pick up. And, remember that point above, about what makes the GRT so evil- that you pay whether you make a profit or not? Oh, yeah, you pay this whether you make a profit, too. What a sweetheart deal! Comcast, Cigna and others get a huge tax break every year and taxes are lowered. Small businesses get a tiny tax break, and then immediately give that tax break back in a trash fee. And as a byproduct, when Comcast and friends (and Coca-Cola and Exxon) no longer pay, the city’s treasury is further shrunken, preventing the city from providing other services.
Small businesses, like the majority of people in the city, have been sold a false bill of goods with respect to tax cuts. If anything can show what this has really been all about- breaks to big corporations- it is this.