Coalition pushes for hike in the gross receipts portion of the BPT
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Coalition pushes for hike in the gross receipts portion of the BPT
We mentioned this morning the various budget-balancing scenarios that Council seems to be considering. Isaiah Thompson at City Paper reports on a coalition that's pushing an additional idea -- a hike in the gross receipts portion of the business tax, to mid-nineties levels.
The idea is this: the gross receipts tax is a tax on net sales – rather than revenue/income.
Because large companies can easily hide or move their income, the reasoning goes, the gross receipts tax is the only way to tax the operations of major, national retailers in the area.
One of the strongest arguments against raising this tax is that, because it taxes sales regardless of income, it can tax a business that isn't turning a profit. To answer this challenge, the Coalition is proposing that all businesses with receipts under $500,000 be exempted.
Councilmembers Green and Sanchez have expressed interest in reconsidering the conventional wisdom about the gross receipts tax (that because it taxes sales rather than profits, it needs to be reduced), but we're not hearing much talk about this in the current budget cycle.
My thoughts on my experience with the Business Privilege tax over here.
Update: Sorry, the coalition in question is the Coalition for Essential Services.
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This has to be prosperity hating Stan Shapiro's group. they conveniently ignore that the city is a price taker, not setter, and no matter what taxes we have, we have to compete with the suburbs and other cities. While their hike may net a larger portion of what is here, there is already far too little here and not lowering business taxes won't change that.— dreinterests- This is prosperity hating Stan Shapiro signing in. Thanks dreinterests for the so accurate description. I do belong to the group, proudly. We, along with the Library Coalition helped save City libraries last year, thereby helping kill Philadelphia prosperity. Our proposal this year, as summarized by Doron, would further kill our prosperity by raising the funds to keep those libraries open while exempting 70,000 small businesses from the gross receipts tax. A TWOFER! It will kill prosperity by helping small businesses along with raising money to keep libraries and pools open. And, oh by the way, for Cleanup. The tax rate rollback -- to 1996 levels -- for large businesses that we're talking about . . . It would still leave the rates below their peak. And it wouldn't induce a single business to leave the City, because contrary to the propaganda that you've been fed, a business can't escape the GRT by leaving town unless it leaves its Philly customers behind as well. That's because the GRT is paid on all of your Philly receipts, no matter where you're located. But never mind, keep chasing phantoms like collecting uncollectibel fines and cutting trivial amounts from the Council payroll as panaceas for your ideologically driven picture of what's wrong.— Stan Shapiro
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