Two-rate land value tax proponents in Philadelphia,
grounded in the Philadelphia Henry George School and the
Center for the Study of Economics (CSE), are encouraged
with progress.
GroundSwell readers will recall that Philadelphia
City Controller Jonathan Saidel in Nov. 2001 released his
"Tax Structure Analysis Report" * to 150 business and
community leaders at a press conference held at the Chamber
of Commerce office (http://www.philadelphiacontroller.org/tax.htm). (Also see
Nov.-Dec. 2001 GroundSwell.)
The Philadelphia Tax Reform Commission then spent a
year deliberating ways to fulfill its mission to recommend
ways to reduce the city's tax burden in a fiscally and
socially responsibile manner. The Tax Reform Commission
held a hearing in Feb. 2002 and about 22 members of the
Pennsylvania Fair Tax Coalition testified for the LVT
component of Controller Saidel's Report (see Jan.-Feb. 2002
GroundSwell).
The Philadelphia City Council of the whole held a
hearing in April 2003 and many Philadelphia leaders as well
as Georgists spoke favorably of a shift to the 2-rate land
value tax (see May-June 2003 GroundSwell).
The Tax Reform Commission did recommend the 2-rate
land value tax as part of its comprehensive report (see
http://www.philadelphiataxreform.org). Contacted by
Philadelphia Asst. City Controller Bruno Moser, Common
Ground-USA responded in Oct. 2003 with a letter of support
to TRC Chairman Edward Schwartz (see Nov.-Dec. 2003
GroundSwell).
Now Philadelphia Mayor John Street, re-elected in
2003 and inaugurated in January, has endorsed the Tax
Reform Commission's recommendations. CSE Pres. Joshua
Vincent emailed us March 9, 2004 about a Philadelphia
Inquirer article in which was reported that Mayor Street,
in a speech to the Greater Philadelphia Chamber of
Commerce, endorsed proposals to "tax local businesses only
on sales within the city, to tax property based on 100
percent of the actual market rate, and to move toward
'land-value taxation,' which would base property taxes on
the value of the land rather than a building."
On April 13, 2004 Common Ground-USA responded to a
request from Philadelphia Forward Executive Director Brett
Mandel (on leave from the Philadelphia Controller's
office). A letter of support, as follows, was faxed to
Mayor Street and emailed individually to the 17
Philadelphia Councilors.
"As you know, approximately 177,000 Philadelphians
voted for tax reform and the creation of the Tax Reform
Commission. The Commission spent $.5 million and nearly a
year to fulfill its mission to recommend ways to reduce the
city's tax burden in a fiscally and socially responsible
manner.
"The Commission's reform blueprint has been endorsed
by residents associations, business groups, and the 21st
Century Review Forum transition team. Common Ground-USA in
our May-June 2003 newsletter, GroundSwell, published a
summary of the 200+ page transcript of the testimony at the
April 29, 2003 hearing in the Philadelphia City Council
chambers relating to Philadelphia Controller Jonathan
Saidel's tax reform package. Complimentary copies of that
newsletter were bulk mailed to Mayor Street and to you
individual councilors and also to members of the Tax Reform
Commission. That article, "Hearing Held on Proposed
Philadelphia Tax Reform," is posted on Common Ground-USA's
web site at http://www.progress.org/cg/phil903.htm.
Common Ground-USA has activist members in Philadelphia and
held our annual national board of directors meeting in
Philadelphia in 1989. Since James Tayoun served on the
Philadelphia City Council and Betsy Raveal served as
Finance Director, we have been following closely as
recommendations have been made and considered.
"The Commission's thorough research and recommended
total package comprehensively address the group's initial
charges -- decreasing tax burdens, promoting fairness and
equity, and improving Philadelphia's competitiveness.
"We commend the Commission's recommendations to
phase in land value taxation so that at the end of ten
years, 50% of all real estate tax revenues will be
generated from a tax on the value of land and 50% from a
tax on the value of structures. We commend the
Commission's recommendations of comprehensive assessment
reform, to assure fairness to all property owners and
property tax payers. We further commend the Commission's
recommendations to continue reduction of Philadelphia's
counterproductive gross receipts tax on business and city
wage tax.
"As you consider the City's Fiscal Year 2005
Operating Budget and Fiscal Year 2005-2009 Five-Year
Financial Plan, we ask you to please support the pending legislation to enact the
recommendations of the Tax Reform Commission, which will
reduce the onerous burden of city taxes and improve the
fairness of the city's tax structure.
"The Commission's package of recommendations will
help the city attract and retain firms and families,
creating prosperity through new job opportunities and
wealth creation. This will play a major role in the
continuing transformation of Philadelphia's neighborhoods.
"While the administration supports a number of the
Commission's tax reform measures, picking and choosing
among the recommendations will not generate the economic
development benefits the city needs and it could create
consequences that would negatively affect certain taxpayers
in ways that could be very damaging for the city.
Specifically, the administration's proposals:
- Do not do enough to lower the city's onerous tax burden;
- Do not do enough to change the tax mix that sets the city
apart in a bad way;
- Do not do enough to help neighborhood businesses or
start-up firms;
- Miss an opportunity to help low-income residents access
tax credits;
- Could create severe negative consequences for certain
real estate taxpayers.
"The Tax Reform Commission reached three fundamental
conclusions. Philadelphia taxes what other cities do not,
which sets it apart in a bad way. Philadelphia's tax
burden is higher than the burdens imposed by rival cities
and surrounding suburbs, which makes the city
uncompetitive. Finally, Philadelphia's taxes unfairly so
some taxpayers pay less than their fair share while others
are forced to pay a higher burden.
"To remedy these problems, the Commission proposed a
package of recommendations that stands together like a
three-legged stool of complementary proposals:
- Leg one would dramatically reduce the burden of the Wage
Tax.
- Leg two would reform and gradually eliminate the Business
Privilege Tax.
- Leg three would make the Real Estate Tax system fair and
transparent.
"The recommendations of the Tax Reform Commission
represent a true plan for change that is a prerequisite for
the implementation of other initiatives. We respectfully
request you to adopt the recommendations of the Tax Reform
Commission."
Philadelphia Forward's Brett Mandel, as well as
CSE's Josh Vincent, are now rallying supporters for a May
10 public hearing that the Philadelphia City Council will
hold as part of the process to consider the city's Five-
Year Financial Plan. The Henry George Foundation of
America, Philadelphia, is mailing facts and figures on land
tax to 175,000 homeowners. The City Council's vote on
land value taxation will be critical. You can follow
developments on Philadelphia Forward's website,
http://www.philadelphiaforward.org.