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Monday, March 10, 2008

A Philly Tax Cutter?

City Journal sounding on what Mayor Nutter needs to do to turn the Philadelphia economy around.

The results of the city’s hostility toward business are evident. While the greater Philadelphia region added 110,000 jobs over the last decade and Pennsylvania gained 300,000, the city lost 10,000. Moody’s latest report on the city warns off businesses, pointing to “aging infrastructure,” “weak population growth,” and a grim long-term economic forecast. The city’s largest employers are immobile businesses—hospitals and universities. The population continues to flee, with another 8,000 people leaving last year.

Philadelphia continues to have the nation’s second-highest individual tax burden after New York City. Philadelphia Forward cites a study finding that a typical city resident’s total tax burden from state and local taxes is 14 percent, compared with 9 percent in the nearby suburbs. For businesses, it’s way worse—roughly nine times what businesses pay in other large American cities or nearby suburbs.
Another interesting point the article raises is how Ed Rendell, as mayor, started out by trying to appease individual companies through corporate welfare, but seeing the failure of such a policy, "began to reconsider his policies" and pushed for tax cuts to revitalize the local economy.

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