City Council approved repeal of wage-tax-rebate
Lost in the shuffle of the budget debate, City Council voted Thursday to repeal the late City Councilman David Cohen's working families' wage-tax-rebate law.
City Council approved repeal of wage-tax-rebate
Jan Ransom
Lost in the shuffle of the budget debate, City Council voted Thursday to repeal the late City Councilman David Cohen’s working families’ wage-tax-rebate law.
The law was set to go into effect in 2017 after being delayed several times by former Mayor John Street in 2006 and Mayor Nutter last year. Thursday the administration was successful –Council voted 10-6 to kill the law. Council members Cindy Bass, Jannie Blackwell, Wilson Goode Jr., Kenyatta Johnson, Dennis O’Brien and Mark Squilla voted against the repeal. Councilwoman Maria Quinones-Sanchez was absent.
The wage-tax-rebate –modeled after the state’s Low Income Tax Forgiveness program –would have provided relief to 165,000 Philadelphians earning 200 percent below the poverty line, said Revenue Commissioner Keith Richardson.
“People at that level of poverty need that money to spend every day of every week,” Goode said. “A lot of people are struggling economically.”
“We know that money will be spent locally,” he added. “It’s more of an economic boost to do a wage-tax (rebate) for the poor.”
But the administration said they want to do broad-based wage-tax relief that would apply to all Philadelphians, not just a few. The city’s Budget Director Rebecca Rhynhart said the administration includes in their five-year plan broad based wage-tax relief.
As a Councilman, Nutter supported the law, but at a press conference Thursday afternoon he said, “The additional cost of that particular bill as well intentioned as it is in these current economic circumstances …2006 was before the worst recession since the great depression. We can’t afford that level of tax-relief at this time or in the near future.”
The Cohen law would have cost the city $8.5 million during its first year of implementation and then jump to $22 million the following year, Rhynhart said. The administration’s broad-based tax relief would cost $11 million in fiscal year 2014 and then $23 million the next year.
Councilman Bill Green, who supported the repeal, said “I would like resources available to address taxes that prevent us from growing the city as opposed to small amounts of money that go to a lot of people. We need to use money to create jobs.”
Supporters of the law clutched signs calling for Council to vote against the repeal and booed when the measure was approved.
Sherrie Cohen, Cohen’s daughter and organizer of the Fair Share Coalition said, “People in this city, including city’s leadership speak about the war on the poor, but the Mayor and City Council should not be voting to increase their hardship.”
This doesn't even apply to me, but it's funny how they'll repeal this, but refuse to give up DROP. The city can't afford this, but how many people are on Nutter's and city council's staff at 100K+ salaries? How many deputy do nothings do you need? It doesn't matter whether or not wage tax relief is across the board. When the time comes they'll just lie and say the city can no longer afford it. It doesn't matter though, because the sheep will continue to vote blindly in this city.— ghost722- Councilman Bill Green, who supported the repeal, said “I would like resources available to address taxes that prevent us from growing the city as opposed to small amounts of money that go to a lot of people. We need to use money to create jobs.”
Amen, Bill.— Zero - "The administration said they want to do broad-based wage-tax relief that would apply to all Philadelphians, not just a few." --What a lie.— MrSmith
- Nutter and city council again prove that they are true numnuts and are the single biggest reason that philly is only about 13 months from Bankruptcy— rduexpress
- POWER CORRUPTS ABSOLUTE POWER CORRUPTS ABSOLUTELY, THE RICH GET RICHER THE POOR GER POORER— collegestudent
- I don't believe anything Nutter says. He has had more tax increases that were 'temporary' that are now permanent. I agree with ghost722, drop DROP!— stan123
Comment removed.- THANKS COUNCIL!! And Philly.com just had a columnist patting them on the back for doing a decent job. I'll have whatever he was drinking! These guys are the worst! They continue to raise taxes & fees on the citizens & businesses of Philadelphia, all the while not making tough choices on headcount reductions within the city's workforce or reducing overly-generous employee costs like pensions & the ridiculous DROP program. (In fact they even defended/protected DROP) Mayor Green said it in 82" and its STILL THE CASE! They are the "worst legislative body in the free world."— kennedy2
- The sad thing is that the Democratic Party used to be the party of the working class. This vote said "working class, drop dead." Imagine cutting out hundreds of dollars of desperately needed help from 165,000 working but struggling Philadelphians in order to pad the wallets of the super-well off. The 1% in this City, by deducting up to 35% of the wage tax against their federal taxes, pay at a lower real rate than everyone else, yet will get the major lion's share of the across the board cuts that these Democrats aim to pass next year. They also have major sources of dividend, interest, and capital gains income that is exempt from the wage tax and is only payable, in part, under the School District Income Tax. It just goes to show you that the power of money is just as corrupting an influence in the Democratic Party as in the Republican Party. Until we have public financing of elections, it will forever remain so.— Stan Shapiro
- "We can’t afford that level of tax-relief at this time or in the near future.”
How about the ten year tax abatements? Isn't that tax relief? Oh.....never mind, friends of mikey.— wiredalot - I do believe that bill was well intentioned. Unfortunately, in Philly it would probably just amount to giving a handout to the scofflaws and tax cheats who underreport their income in order to circumvent the ridiculously high wage tax. I completely support the council members, and administration, who would rather lower the entire tax rate than get behind this populist gesture. Better to have a low overall rate that people won't be desperate to circumvent because of it's ridiculousness than to continue driving, you guessed it, the working class, out of the city by taxing them as heavily as we are.— SirEdward
- SirEdward, despite, or maybe because of, your nobility, you make no sense. The wage tax, unlike taxes on unearned income, is deducted from one's paycheck. There is no evading it for the vast majority of workers like the 165,000 who have now lost their tax relief. Instead of putting real money in their pockets, the alternative across the board cut will not even be felt by them. It will be hundredths of one percent. But it will be felt by the David L. Cohen's of the world who may find another $10,000 in their pockets that they don't need. All that cut will do is further increase income inequality, which is already out of control in our City and country. Increasing inequality is creating an unvirtuous cycle by evaporating demand for the goods and services that millions of people need but can't afford. That, in turn, further increases poverty, further depressing demand, and so on and so on. I don't know how cutting David L. Cohen's taxes will increase sales of TV's and economy cars.— Stan Shapiro
- A rare example of council doing the right thing.
The city tax code is a foolish vehicle for income redistribution. That needs to be done at the federal level, not the city. It is too easy for the rich to leave the city.— samac - Stan shapiro, shut up with the 1pct bs. The majority of people will benefit from lowering the wage tax.
The last thing Philly needs is another set of non taxpaying poor people. we already let the poor pay no real estate tax, give them free natural gas in unlimited quantities and other perks that no one else in the country gets.
What do we get in return? One of e poorest least educated cities in the country in the middle of one of the wealthiest most educated metro areas in the country.
Sometimes it's not ideological, but just about common sense policy. You cannot use the city f Philadelphia to pursue the rich. They will move 5 miles to bala cynwyd. Denying this reality is foolish.
— samac - Stan Shapiro: Put your money where your mouth is and run for City Council. I would like to see you defeat Bill Greenlee who is a disgrace to his mentor.— Michael T. Welsh
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David Gambacorta spent a small eternity writing about cops, drug dealers and serial killers. Now he’s writing about power and politics – which sometimes reminds him of the old crime beat. He joined the Daily News in 2005. And yes, he knows you’re not quite sure how to pronounce his last name. E-mail tips to gambacd@phillynews.com
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Jan Ransom, a native New Yorker, joined the Daily News in 2010 after graduating from Howard University. She has since written about the difficulty of filing police complaints, tax deadbeats and life after violent home invasions. She joined the Daily News City Hall Bureau in 2011 and has plunged headfirst into reporting on administration budget battles and City Council shenanigans. E-mail tips to ransomj@phillynews.com
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Sean Collins Walsh is from Bucks County and went to Northwestern University. He joined the Daily News copy desk in 2012 and now covers the Nutter administration. Before that, he interned at papers including The New York Times, The Dallas Morning News and The Seattle Times. E-mail tips to walshSE@phillynews.com
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