Tax Reform

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.

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.

WASHINGTON - The Republican cochairman of the deficit-fighting "supercommittee" said Thursday he wanted to tackle corporate-tax reform, a theme the White House has promoted for months. But big differences remain, including whether changes should lead to higher overall taxes on businesses. There is also wide disagreement over whether Congress should overhaul corporate taxes without addressing taxes individuals pay. Millions of business owners pay taxes on business profits on their individual returns.

Billionaire Warren Buffett famously believes rich Americans should pay more taxes. But his giant railroad, BNSF Corp. (Burlington Northern-Santa Fe) , through its lobbying group, the Association of American Railroads, backs a new business coalition that wants Congress to cut the top U.S. corporate income tax rate, from 39.2 percent to about 25 percent. The railroads have joined AT&T, Boeing, FedEx, Lockheed Martin, UPS, Verizon , and Walt Disney in pushing for the change.

WASHINGTON - President Obama will call Monday for a new minimum tax rate for people making more than $1 million a year to ensure they pay at least the same percentage of their earnings as middle-income taxpayers, according to administration officials. With a special joint congressional committee starting work to reach a bipartisan budget deal by late November, the proposal adds a new and populist feature to Obama's effort to increase the political pressure on Republicans to agree to higher revenue from the wealthy in return for Democrats' support of future cuts in Medicare and Medicaid.

I JUST GOT done reading Jordan A. Harris' op-ed about teen mobs, and I have one thing to say: REALLY? Does he expect normal, law-abiding, taxpaying citizens to believe this garbage? Mr. Harris is a typical bleeding-heart liberal who's helping to destroy this city and country. To have the gall to say that these animals who assault people, destroy property and embarrass this city are nothing more than frightened youth who dreams have died is disgusting! These poor teens talk of how the schools and community fails them - ridiculous!

The drumbeat for U.S. income-tax reform never goes away entirely. Sometimes, like now, it grows very loud. But that does not mean prospects for substantial changes have improved, especially given the battle lines being drawn on the new congressional panel charged with finding ways to trim the nation's deficit by $1.5 trillion. Predictably, Democrats on the so-called super-committee are calling for additional tax revenue to help close the gap between income and spending, while Republicans, including Pennsylvania Sen. Pat Toomey, are focused on spending cuts.

Conventional wisdom holds that the congressional super-committee established by the debt-ceiling deal to propose further deficit reduction will go nowhere. I'm not so sure. There is a grand compromise to be had. It does, however, require precise sequencing. To succeed, it must proceed in three stages: Tax reform: True tax reform that removes loopholes while lowering tax rates is the Holy Grail of social policy. It appeals equally to left and right because, almost uniquely, it promotes both economic efficiency and fairness.

Congress and President Obama took a small step toward stabilizing the federal government's finances with their last-minute deal to increase the nation's debt ceiling. But they punted the next, even more important and more difficult phase of deficit-cutting work to a 12-member super-committee. There, as Yogi Berra would say, it's starting to look like déjà vu all over again. While congressional leaders haven't picked members of the super-committee yet, the battle lines are shaping up in a way that's distressingly familiar.

HARRISBURG - Pennsylvania's treasurer said Monday that it was a "really bad idea" for Gov. Corbett to sign a no-new-tax pledge. Treasurer Rob McCord, a Democrat, said signing such a document leads elected officials to make policy by "rent-a-pledge," and to throw around "fancy-pants words that complicate the conversation. " "When you outsource your policymaking to lobbyists in Washington, I think that's very unwise . . . because you lose a sense of context," McCord said, referring to the group Americans for Tax Reform, which promotes the pledge.