Taxing Solutions

Allowing proposed tax hikes to become permanent would only damage city funds.

Mayor Michael Nutter is proposing tax hikes to help combat the city’s severe budget problem. Specifically, he wants to raise the sales tax from 7 cents to 8 cents. Nutter also wants to raise property taxes for two years, first by 19 percent from current levels, and by 14.5 percent from current levels the second year.

As detailed in news reports, many supposedly temporary taxes – including the wage tax and liquor tax – ended up becoming permanent. Some Philadelphians are reasonably worried that these taxes will end up just like their “temporary” predecessors and be just the opposite.

A Philadelphia Daily News cartoon captured just that concern by portraying Nutter’s promise that the taxes would be as temporary as a punch line delivered in a comedy club.

These concerns are justified by history, but Nutter and City Council, should they pass the tax raises, would be smart to let them expire.

It’s no secret that major cities are not in their primes, and their futures are uncertain. Letting big-city taxes continue as they have will only push Philadelphia further along on its precarious dance with bankruptcy.

The real solution is to tighten the city’s payroll. This may seem like a gargantuan task, but it is not. The Office of the Register of Wills is a prime example. Once activists and watchdogs started calling for the office to be dissolved, register of wills Ronald Donatucci started cracking down on his staff eating at desks and taking personal phone calls.

This is exactly what needs to happen. Government jobs are often considered cushy, low-demanding jobs, and for good reason: they too often are. When the phrase “Getting a city job so I can stop working” is not an oxymoron, and is actually heard on a Philadelphia street, there is something very wrong with how city government works.

Ed Rendell managed to pull the city back from a financial black hole during his tenure as mayor, and the city hasn’t hated him for it. Just the opposite, in fact.

In that vein, Nutter needs to take on the city budget not by allowing his proposed taxes – should they be passed – to become another permanent tax on city residents, but by taking on city largesse, in addition to going after tax delinquents and ineffective policies.

Philadelphia doesn’t have to be struggling financially forever. It will just have to take some innovative, probably painful steps.

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