Cohen tax credit

When people are generous, but a society is short-sighted

Last week the Inquirer posted a powerful story about the struggles of the region’s working poor. Their particularly compelling case of Sandra Walerski and her family, who shops on $25-45/ week, drew a follow up in yesterday’s paper as dozens of people nationwide offered contributions to the family, including a surgeon who offered to consult Ms. Walerski about a brain tumor, Delaware County Community College officials who were considering an academic scholarship for the Walerski’s 20 year old son, and even a mention by John McCain.

It goes to show that people are extremely generous and compassionate about poverty; they want the situation addressed. They’re even willing to give up their own money to do it. The only problem is there are 300,000 some Sandra Walerskis in Philadelphia alone. This is not a problem for individuals to tackle but a deep-rooted problem for our city and region.

On Wednesday, members of One Philadelphia went to City Council to talk about a real program to provide relief to struggling families – revive the Cohen tax credit currently targeted for elimination by the City. They took a beating for it, but their argument stands: poverty is growing in Philadelphia and families need and deserve help.

The Cohen tax credit is a cornerstone in tackling poverty in our neighborhoods. Consider the argument made by Jonathan Stein in yesterday’s Daily News:

The rebate would make the 80-year-old regressive wage tax more equitable by helping struggling and working families just like the successful programs it's modeled on: the federal Earned Income Tax Credit and state Tax Back program. It was one of the greatest progressive reforms in City Council history. Cohen was proud of Council, including one of the co-sponsors of the rebate, then-Councilman Nutter. From on high, Cohen likely applauded the new mayor's inaugural promise of a "new Philadelphia" committed to "moving hundreds of thousands out of poverty and on to a better life."

The rebate would do that by putting money directly to families making less than twice of the poverty line - about $35,000 a year for a family of three.
The Pathways PA "self-sufficiency standard" says such a family needs $44,000 a year to make ends meet - no vacations, no car, no eating out, just basics.

A three-person family earning $25,500 a year, qualifying for a full state Tax Back refund, still pays $950 in city wage taxes.

Of the 300,000 working poor in Philadelphia, an overwhelming number are families in our public schools. If the figure that over 35% of Philadelphia’s children live in poverty doesn't humble you enough, consider that the majority of schools in Philadelphia have poverty rates in the 90th percentiles.

We know firsthand the consequences of poverty in our schools. We know the ways that our children suffer from poverty at home: when the utilities are shut off, is homework really a possibility? When a single mother is working two jobs and affordable daycare is out of reach, who’s coming to the parent teacher conference? When immigrant children are packed two or three families to a household, do we really expect someone to complete a science project on time? Last Christmas, my daughter’s own classmate was suddenly rendered homeless, and it made me realize how little a priority school can be.

We still need to keep the pressure on about the many reasons why the Cohen tax credit remains important. It has its ledger costs, yes, of course, but let's make no mistake that its elimination is something we’ll be paying for many times over.

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