There hasn't been this much talk of tax cuts since George W. was campaigning. The difference is that Saidel is not campaigning, and his suggestions call for shifting the tax burdens that currently cripple growth and structuring our tax base so that we don't punish people for living here - or businesses for operating here.
The plan calls for reducing the wage tax to 3.5 percent by 2007. It would reduce one part of the business privilege tax by 38.5 percent and another by 16.7 percent. Real-estate taxes would shift so half of the revenue would come from a tax on land - rewarding building and punishing speculation.
With lower taxes, the city could attract more people and businesses, thereby stimulating more revenue. In other words: high taxes repel, low taxes attract.
It's like a big TIF for the rest of us - those tax incentives that are now handed out to corporations to entice them to do business here. The biggest obstacle to this smart blueprint for reform is the shift in mindset that would be required. It would demand that the city think about itself in a different way, abandoning the punishingly high tax burdens we now place on workers and businesses that drive them out of the city, and understand that we should be competing more smartly with other cities. The plan would force us to admit that the bottom line is not the revenue that we must squeeze out of the few remaining city dwellers. In reality, that bottom line is long-term growth.
Already, City Hall is making faces at the plan, saying that it's too risky. But what would be really risky would be to ignore its mantra that "lower taxes lead to growth."
See for yourself. The full report is available online (www.philadelphiacontroller.org/tax.htm). A calculator function allows you to see exactly how the shift to land tax would affect you.
The School District's busted budget became a tangible crisis point demanding a solution. The city is not in the same straits as the district, although Saidel thinks that's only a matter of time.
He deserves credit, though, not only for forcing us to confront that little black cloud on the horizon - but giving us some smart tools to eliminate it.*
