DN Editorial: Council passes business-tax reform - finally!


YESTERDAY, City Council passed two bills that will dramatically change the business landscape in Philadelphia. These are game-changing laws that finally begin dismantling the punishing tax structure that for decades has been renowned for its contempt for business start-ups and Philadelphia-based companies.

One bill, by Bill Green and Maria Quinones-Sanchez, will relieve the business-privilege-tax burden for small, city-based businesses, which have long paid more than their fair share compared with those headquartered outside the city. The other, introduced by Jim Kenney, will aid new business development by eliminating start-up fees and exempting businesses from the business-privilege tax during their first two years.

There's a lot to like about this. The reforms are data-driven and targeted to new and small business, which the city has discouraged. We also applaud the cooperation between Council and the Nutter administration in getting the bills passed.

Most of Kenney's bill will kick in during tax year 2012, but the Green/Quinones-Sanchez bill won't take full effect until tax year 2016.

So why wait?

The administration argues that the reforms need to be postponed because they could cost the city as much as $33 million each year in tax revenue- a lot in a struggling economy.

That doesn't count the potentially off-setting growth in business and wage taxes that could result in more businesses' being established here- which presumably is the whole reason to make this change.

We'd like to see legislation that would serve to trigger reforms as soon as conditions are right, instead of waiting passively for some far-off date when the economy might be better. A trigger like that would signal that our leaders are as confident in this actually growing the city as they should be.