Principles business can live by

Creating a tax and business climate in Philadelphia that creates jobs is a priority for the Chamber of Commerce.
Creating a tax and business climate in Philadelphia that creates jobs is a priority for the Chamber of Commerce. (ERIC MENCHER / Staff Photographer)
Posted: September 28, 2012

By Rob Wonderling

While businesses throughout the region are seeing moderate growth, Philadelphia continues to lose jobs. In 2010, according to the Bureau of Labor Statistics, the city had an average of 657,000 jobs. That number declined to 648,400 by July of this year. And as the nation's unemployment rate has dropped slightly to 8.3 percent, Philadelphia's hovers at an alarmingly high 11.1 percent.

Since the mid-1990s, the city's Five-Year Financial Plan has acknowledged that Philadelphia's unusually high tax rates make it difficult for the city to attract and retain businesses and residents. In 2003, the Tax Reform Commission laid out the facts: Philadelphia's tax rates are substantially higher than those of other major cities and nearby suburban municipalities.

In 1996, Philadelphia began a program of annual, incremental cuts in the wage tax, earnings tax, net-profits tax, school-income tax, and gross-receipts portion of the business income and receipts tax. Mayor Nutter was committed to reducing tax rates for businesses and employees, but, due to the recession, plans to lower taxes further were delayed.

Last spring was the third year in a row in which the city faced a budget problem and solely focused on the revenue side to address it. The significant cost reductions being executed by the Philadelphia School District are to be commended, and we encourage the Nutter administration and City Council to reduce the cost of government to free up revenue for priority needs such as public education.

In the meantime, we must jump start our local economy by renewing the commitment to reduce taxes on employers and employees.

This year, the Greater Philadelphia Chamber of Commerce and its roughly 5,000 members are supporting efforts that we believe will help grow our economy. First and foremost, we support the long promised wage- and business-tax reductions. Additionally, we support the implementation of Actual Value Initiative (AVI), as well as the sale of assets to provide one-time pension relief.

The Chamber also supports legislation to create a city land bank. With more than 40,000 vacant lots and buildings in the city, action is needed to bring them back into use. The city annually spends $20 million to maintain vacant and blighted properties, which fail to generate much-needed revenue for the city.

As part of our efforts to attract, retain, and grow jobs, the Chamber has developed a list of principles that we use as a guide in reviewing legislative proposals at all levels of government. Some of these principles are:

Government rules and regulations should provide for safe and responsive business operations, but should not be onerous, costly, or out of context with competitive locations.

Government must be conscious of the overall cost of doing business - taxes, fees, insurance, regulatory expense - so as to provide a competitive business environment.

Taxes should be broad-based, should not target a particular industry, and need to be shared equitably between business and citizens.

Government at all levels must operate in an efficient way to maximize the services that it provides.

Quality-of-life issues impact both the business environment and serve as a positive factor in recruitment. We must also play a constructive role with government efforts to address public safety concerns.

For more information about the Chamber's public policy agenda, please visit relayphilly.com.


Rob Wonderling is president and CEO of the Greater Philadelphia Chamber of Commerce. E-mail him at rwonderling@greaterphilachamber.com.

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