The recommendations in the report, by the mayor's task force on tax policy and economic competitiveness, are not radically new notions. They reflect, in large part, the findings of prior studies, including a more comprehensive one completed in 2003 by the Tax Reform Commission.
But the task force report does focus on a key goal: How to make changes that will yield 70,000 more jobs by 2025. It also outlines administrative steps that must be taken to make that happen, from adopting a more accurate system for assessing property values to creating the job of a tax advocate.
Formed in March, the 17-member task force suggests a return to regular cuts in the wage and business-privilege taxes. Under its proposal, the nonresident wage tax would drop from the current 3.5 percent to 2.4 percent in 2022. Likewise, the resident wage tax would fall from 3.93 percent to 2.77 percent in the same time period.
"Recommendations to improve the tax structure have been offered in report after report, but while there have been some improvements, implementation has not been comprehensive due to concerns about the costs and risks of change," wrote the task force chairman, Harold Epps, president of PRWT Inc., and its vice chairman, lawyer Joseph Dworetzky. "These are, of course, valid concerns, but the cost of inaction is even more troubling."
Specifically, the task force said it believes the city stands to lose upward of 70,000 jobs over the next 15 years unless major changes are made in how Philadelphia taxes.
The report was met with an initial bout of skepticism by some City Council members who attended a briefing held for them yesterday by task force members.
Council members Maria Quiñones Sánchez and Bill Green, for instance, chafed when told the report, and its authors, did not address Sánchez's proposal to preserve the gross-receipts tax by allowing businesses to reduce their burden by instead crediting that tax against what they pay in net-income taxes.
Task force member Robert Inman, a finance professor at the University of Pennsylvania's Wharton School, responded that, in part, the task force focused primarily on tax-policy changes that were directly connected to job growth. Epps also noted the task force's limited resources and mid-October deadline to submit the report to the mayor.
Nutter, who has not endorsed any of the report's findings, was scheduled to hold a news conference about the report today.
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