Comment by dogas | Hacker News Reader

Comment by dogas | Hacker News Reader

Glad to see some light shed on how business-unfriendly Philadelphia is, with their exorbitantly high gross receipts tax and city wage tax.

The city wage tax is responsible for the city's 40 year long population decline, and most people now do the reverse commute to neighboring counties, because no business owners in their right minds would begin or continue operations in philadelphia county. In fact, there's a good amount of large companies set up right across the city line. The net effect is you see shuttered store fronts and blight on nearly every street, regardless of how nice the neighborhood is.

And, of course, nobody in city hall understands this. The entire political scene in philly is entrenched, pay to play politics.

Don't get me wrong, if these taxes were making philly a great place to live, I wouldn't be bitching. If they had an amazing transportation system, the streets were nice and pothole free, the services provided were amazing, the homeless had a place to go, the police coverage was very effective, then sure, I'll pay for those great things. However absolutely none of that exists in philly, which makes living and starting a business in a neighboring county that much more attractive.

The wage tax is really obnoxious. I essentially took a pay cut just by taking a job in the city. As you say, it would be easier to swallow if things felt more like Sweden and less like Detroit.

Its not quite fair to complain about this though, since PA state income tax is relatively low (3% fixed). Pittsburgh has city taxes too, something like 1% for Allegheny county and another 2% in the city of Pittsburgh for schools (which non-residents dont have to pay). Even accounting for those taxes, you're probably still around what you would be paying in a lot of other states.

No, the issue is I went from working and living in the suburbs to working in the city. For doing that, I pay an additional 2% in taxes on top of my local (suburban) tax of 1%. The wage tax on non-Philly residents is ~3% and my local municipality will let me count that toward my local taxes. So, it really is a pay cut. It's not going to make me go broke, but it is infuriating.

Did you factor taxation into your location change or was it an incidental outcome?

I did factor it in when deciding whether or not to take the job. In the end, I calculated I would be saving a bit on federal taxes because I would be using regional rail instead of driving (and thus paying for transportation with pre-tax money). It was enough to offset the local taxes.

You see the same effect here in Pittsburgh. Many companies have set up shop in Cranberry, just outside of Allegheny county.

As I understand it the wage tax was sort of a punishment/band aid for white flight in the 70's and 80's, when companies workers started moving to the suburbs but working in the city, right? The resulting backfire - new business completely moving out of the city - apparently didn't drive much of a point home. I guess it does put money in the bank - at the expense of completely alienating the tax base...

So much of government in Philly is entrenched in a very defeatist / corrupt attitude that hangs like a dark cloud over everything. Honestly sometimes I think what Philly really needs is to have some fresh thinking imported from outside the city.

I agree with you that the wage tax makes the city less attractive to live in than the neighboring burbs. I chose to live in Conshohocken rather than Chestnut Hill/Mount Airy mainly because of the wage tax.

That being said, I do think that the Nutter administration realizes this issue. The problem is that if you cut the wage tax, you have to increase revenue generation from something else. The city is already has revenue issues, so a radical change in tax structure seems unlikely.

You can cut taxes and services.

JunkDNA and dogas suggest that the taxes are high while the level of service is low. That suggests the problem isn't lack of revenue, but inefficiency due to bureaucracy, corruption, ineffective management or the like. It is almost never a solution to throw money at such a situation.

"...if you cut the wage tax, you have to increase revenue generation from something else."

...uh, no, you don't.

It seems you really don't object to Philadelphia's "exorbitantly high" taxes at all. What you object to is that these high taxes haven't turned Philadelphia's government into an effective deliverer of all the services that you wish it would provide, which if delivered would result in the city becoming an ideal place. Maybe (since you really don't object to paying "exorbitantly high" taxes) you'd back a proposal to raise taxes to allow achievement of this goal?

Id agree with that proposal if Philly taxes were lower than or on par with the national average, but the fact is philadelphians already shoulder one of the highest tax burdons in the US.

> Maybe (since you really don't object to paying "exorbitantly high" taxes) you'd back a proposal to raise taxes to allow achievement of this goal?

Why the assumption that raising taxes would result in better services? The experience in Philadelphia suggests otherwise, at least as far as Philadephia is concerned.

I most certainly do object to Philly's high taxes. I was merely making the point that you can't even point to decent city services as a positive for enduring high taxes (something you most definitely can do in some other high-tax areas).

I wasn't replying to your post.

My post summarized the post I was replying to (by dogas), highlighting the apparent contradiction contained therein: Philly's taxes are "exorbitantly high" yet dogas would be _happy_ to pay them _if only_ ...

And I added the absurd/tongue-in-cheek suggestion that maybe dogas would be interested in trying to see if _higher_ taxes would achieve dogas' ideal. I think I would have avoided the downmodding by annotating with <tic> to make this clear.

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