Business Tax

City Councilman Edward A. Schwartz said yesterday that he would vote against increasing the property tax and proposed that the city's business community continue to provide its current level of taxes, not less, to help pay for operating the public schools. Rather than support the 6.5 percent property-tax increase that Mayor Goode proposed last week, Schwartz said, City Council should reject the business-tax reduction that Goode proposed in March and that is in the city's revenue estimate for fiscal 1987, which begins July 1. Schwartz said that if the business-tax reduction were rejected, there would $14 million more available for the school district in each of the next two fiscal years.

Councilman Bill Green took aim at the city's so-called blogger tax Thursday, introducing legislation that would exempt bloggers and others whose work is a hobby from certain city taxes. The national media went negative on Philadelphia in August after the city increased efforts to collect fees for the business-privilege tax license and related levies. Some of the people who got letters saying they may owe the city money were bloggers, setting off a wave of criticism that the city's policies would drive away young, tech-savvy residents.

A "tax commando" who earned the nickname collecting millions in unpaid taxes for the City of Philadelphia is pursuing scores of people who are not paying taxes to the borough. Attorney Nicholas Panarella has sent out a cascade of letters in the past month. Some of those receiving them don't live or maintain offices in West Chester. But they profit from work in the county seat and haven't paid the business tax - a licensing fee that is $10 a year for those who make less than $15,000 and $150 for those who make more.

As an alternative to Mayor Goode's proposed 6.5 percent property-tax increase, City Councilman John F. Street recommended yesterday that the city next year delete its $8 million in funding for the proposed Center City convention center, increase one business tax and keep another at its current level. Street also proposed reducing the parking tax by 25 percent and providing the convention center revenue by further increasing taxes on business. G. Fred DiBona Jr., president of the Greater Philadelphia Chamber of Commerce, called Street's proposal "counterproductive.

Tax bill negotiations hit an impasse yesterday as House and Senate conferees, meeting together for the first time in more than a week, found themselves unable to agree on how much to raise business taxes. "We are 90 percent in accord," said Rep. Charles Rangel (D., N.Y.). "That 10 percent can stop us. We've got a snag. " Bob Packwood (R., Ore.), Senate Finance Committee chairman, said he would offer a new proposal to his own conferees later this week that could narrow what is now a $27 billion gap between the respective business tax increases proposed by the two chambers.

The proposed business-privilege tax, the target of heated opposition in the past, may finally become a reality in West Chester. The tax has been brought forth repeatedly as a way out of the borough's budget woes. Each time, members of the business community lobbied hard enough against the proposed tax to shoot it down. But this time it's different. The tax, proposed by Councilman Mitch Crane, may very well pass. "I've heard all the arguments for and against this tax over the course of the past two or three years," said Finance Committee chairman Richard A. Fazio, "and I don't see any other option.

Caln Township merchants continued their assault on a proposed business tax Thursday, pounding the Board of Commissioners with the now-familiar complaints that the tax would be unfair and would drive away businesses. There was evidence, however, that the business people were making headway in their fight against the proposed tax, which the commissioners are considering to offset a loss of $120,000 in federal funds and to provide more police and highway services in the growing township.

At the last possible minute, Mayor Street yesterday put the kibosh on a bill that would have axed hundreds of millions of dollars in punishing business taxes through 2017. Shortly afterward, this year's grueling budget process officially came to an end. The mayor signed off on City Council's $3.4 billion budget and its plan to further cut the city wage-tax rate, an average savings of $88 a year by 2009 for a person earning $30,746, Philadelphia's median salary. "This is not an easy decision, and certainly not a popular one," Street wrote to Council in a letter explaining his actions, "but I lived through the dark days of our fiscal crisis and I do not want to squander what we have achieved in the last 12 years by returning to them.

A plan to tax businesses to pay for road-improvement projects is being pursued in West Whiteland, and the Board of Supervisors plans to air the proposal at a hearing next month. The board, meeting Monday, scheduled the hearing for 7:30 p.m. April 28 at the Township Building. The proposal was prepared by the township Highway Network Improvement Committee, which was formed by the board to study traffic problems in the township. The committee said in a report that the expected cost of the improvements would be about $6 million, which could be raised through the assessment of business properties in the township.

Another large crowd of angry merchants confronted the Caln Township Board of Commissioners on Wednesday, hoping to kill a proposed business tax. The tax plan was attacked by almost every speaker. The commissioners presented several alternatives, one of which was to skip the business tax entirely. But that probably would delay construction of a planned Route 30 bypass, the G.O. Carlson Boulevard, which is needed to siphon heavy traffic from Route 30. About 225 people have attended meetings to speak out against the tax, but Wednesday, one person spoke in its favor.

Councilman Bill Green is continuing to push the Nutter administration on the potential for the mayor's proposed market-value property-tax system to be a tax windfall for commercial property owners. Green on Monday released a spreadsheet that predicts the impact of Nutter's tax proposal, known as the Actual Value Initiative. Based on Green's calculations, the shift to AVI could move $200 million to $300 million in overall tax burden from commercial to residential taxpayers. Green said this could happen because commercial properties are now more accurately assessed than residential properties, which are collectively assessed well below their market values.

WASHINGTON - Here is how Philadelphia-area members of Congress voted on major issues last week: House Business tax cuts. Voting 235-173, the House on Thursday sent the Senate a bill (HR 9) providing a 20 percent income-tax cut to virtually all U.S. partnerships and corporations with fewer than 500 workers as a spur for economic growth. The break would be available to firms having from one to 499 employees, many of which meet the federal definition of "small business. " Because the deduction would be capped at 50 percent of wages paid, companies would have an incentive to hire new workers or give pay raises to existing ones.

"W E envision a tax structure that is fair and simple, real-estate taxes that reflect the true value of property, lower taxes on personal income, and an elimination of onerous business taxes on sales and profits. " That's a quote from the Final Report of the Philadelphia Tax Reform Commission - a report published in 2003, nine years and two major tax reports ago. In 2003 and again in 2009, business leaders, experts and others spent time studying and analyzing the city's tax structure; both groups issued reports remarkably similar in their agreement that Philadelphia's taxes are too high, badly structured and unfair.

Mayor Nutter is "leaning toward" signing a bill that would exempt investment funds and their general partners (big investors) from the city's 6.5 percent business tax on profits, says his spokesman, Mark McDonald. The measure, promoted by Councilman Bill Green and his allies, passed City Council, 16-1, last month, with Councilman Curtis Jones dissenting. Green predicted that, once the measure passed, venture, buyout and real estate funds would be more likely to fill vacant Center City or new University City office space, instead of locating in Boston, New York, Greenwich, Princeton, or Radnor.

A 10 percent income-tax tax cut for every working New Jerseyan will help families keep more of what they earn. It will make us more competitive with other states to attract more new jobs to New Jersey. Lower tax rates will relieve overburdened middle class families. They'll keep job creators here. They'll begin to bring us into a more competitive situation with our neighbors in the region. Now personal income taxes, of course, are not the only excessive burden that has been foisted upon our citizens by government.

IT'S HARDLY news that Philadelphia holds business, and small business in particular, in the same regard most of us hold bedbugs. When the city was a thriving center for manufacturing, the term "business-privilege tax" might have had less of a contemptible ring to it, but 100 years later, the term speaks volumes about how cruel the city's policies can be for anyone daft enough to launch their dreams here. One of the most onerous aspects of that business tax - the one that requires new businesses to pay two years of their taxes up front - should win an award in a "Bad government" contest.

The fate of the city's renegade raccoons stole most of the attention at Thursday's City Council session, but the members otherwise managed to pass two bills to reform the city's business tax structure. One of those bills - sponsored by Bill Green and Maria Quiñones Sánchez - has been in the works for three years and would dramatically change the widely reviled business privilege tax. The second, sponsored by Councilman James F. Kenney, would eliminate most fees for starting a business and would give start-ups a two-year reprieve from business taxes, as long as they hired city residents.

PHILADELPHIA is now open for business. That's the message City Council hopes to send via yesterday's unanimous votes for two bills to significantly change the city's business-tax structure. For years Council griped that city-based businesses are at a competitive disadvantage because they're charged a gross-receipts tax even if they lose money. Meanwhile, chain stores, like Wal-Mart, pay zip because they're not headquartered in the city. But soon all businesses can expect some tax relief with the passage of a bill, introduced by Council members Maria Quinones-Sanchez and Bill Green, that would exempt the first $100,000 from the gross-receipts and net-income portions of the business- privilege tax. "It's the largest single tax reform in a single bill, in a single act in tax history," Green said.

YESTERDAY, City Council passed two bills that will dramatically change the business landscape in Philadelphia. These are game-changing laws that finally begin dismantling the punishing tax structure that for decades has been renowned for its contempt for business start-ups and Philadelphia-based companies. One bill, by Bill Green and Maria Quinones-Sanchez, will relieve the business-privilege-tax burden for small, city-based businesses, which have long paid more than their fair share compared with those headquartered outside the city.

City Council and the Nutter administration reached agreement Monday on two bills that would eliminate most business start-up fees and provide significant relief from the widely despised business-privilege tax. The fees and taxes long have been blamed for putting the city at a disadvantage when competing with the suburbs and other cities to attract employers. The bills, which were moved out of Council's Finance Committee on Monday, eventually would provide more than $70 million in relief, signaling that the city "is open for business," said Councilman Bill Green, who cosponsored one of the measures.