Saturday, February 28, 2015

Taxes have fallen in city, risen in suburbs

Many townships, like Abington, have increased taxes Link: Compared to burbs, city tax burden has eased [Daily News]

Taxes have fallen in city, risen in suburbs

Many townships, like Abington, have increased taxes

Just how much higher city taxes are than suburban taxes is hard to measure, partly because rates vary among dozens of townships and boroughs, and because both the city and suburbs have a variety of smaller taxes and fees.

The city has a one-cent higher sales tax, a 20 percent parking tax, a 10 percent liquor-by-the-drink tax, and a 5 percent amusement tax on theater, sports and museum tickets.

Some townships have special assessments for fire equipment or libraries. Some charge for trash collection, and some impose a "local services tax" of about $50 a year.

Suburban townships that are closer to Philadelphia are less likely to have their own wage tax. Lower Merion and Haverford, for example, still have none.

More urban areas in the region, like Chester, Norristown and Darby, tend to have higher taxes on income.

An analysis of 2007 wage, property and sales tax rates by Wharton finance professor Robert Inman found that the Philadelphia tax burden on a hypothetical family was roughly 13 percent higher than in Delaware County, 37 percent higher than Montgomery County, 40 percent higher than Chester County, and 44 percent higher than Bucks County.

Inman said the gaps would be narrower today because the Philadelphia wage tax has declined since he conducted that study.

Inman, a longtime and well-known critic of the wage tax, still believes it's the last tax the city should raise and the first one to lower.

"It's the one that does the damage," he said.

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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