3.23.2009

I Want Higher Property Taxes


Here's the problem I have with Mayor Nutter's plan to temporarily hike property taxes. Not that I think it's bad to hike this tax, although many are in this camp. Not that I am skeptical that this will be temporary, although many are in this camp.

No, my problem is that in saying that the hike is temporary, he curtails his ability to move us towards a mix of taxes in which property taxes contribute more and wage and business taxes less to the municipal budget. As I have written previously, of all the taxes out there, property taxes are the least distortive and most equitable; and yet, Philadelphia's property taxes are too low, relative to other, more distortive and inequitable sources.

At some point, some mayor is going to have to say the following: over the next decade, we're going to make this right. We're going to raise property taxes and lower wage and business taxes. The City is going to end up with about the same amount of money (i.e. it's going to be "revenue neutral"). Sure, there will be winners and losers, as there always is when there is reform. But the net result will be a taxing system that is fairer, stabler, and less painful to the very people and entities that are most mobile and most needed to be retained within our jurisdiction.

I don't know that Mayor Nutter can be that mayor. Now that he's called the property tax increase a temporary one, he'll doubly not want to turn around two years later and say, "Actually, I'd like to make it more permanent." And, maybe I'm alone in the entire city, but I think that's too bad.
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