Taylor, Keller Introduce Legislation to Reduce Philadelphia Wage and Income Taxes
HARRISBURG—Reps. John Taylor (R-Philadelphia) and William Keller (D-Philadelphia) have introduced legislation to allow Philadelphia to alter the way it taxes real estate to reduce the city’s wage and business privilege taxes.
“In the last 45 years, Philadelphia has lost more than a quarter of its jobs,” Taylor said. “While that precipitous job loss has ended, job growth, wage growth, and salary employment in the city has been identical to what it was in 2003 and the city’s unemployment rate of 7.1 percent as of March 2015 is well above the national rate of 5.5 percent.”
To address this, Taylor has introduced
House Bill 1871. Supported by a coalition of business, labor, and civic groups, as well as the tax commissions of both 2003 and 2009, the legislation would encourage job growth in Philadelphia, by reducing wage and business taxes and shifting to a greater reliance on the real estate tax on businesses.
The key is to amend the state Constitution to allow Philadelphia to be exempted from the Uniformity Clause for real estate taxes.
The Pennsylvania Constitution requires that all taxes in the Commonwealth be applied uniformly among the same class of subjects. Taylor and Keller’s legislation will permit Philadelphia to impose taxes on real estate used for business purposes at a tax rate that exceeds the tax rate applicable to other real estate.
Presently, that rate cannot vary by more than 15 percent from the rate applicable to other real estate. Taylor’s legislation would allow Philadelphia to increase real estate taxes on businesses in exchange for a reduction in the aggregate revenues of the wage and business privilege taxes.
This proposal is limited to Philadelphia because of its extraordinary reliance on wage and business taxes, which provide 66 percent of its municipal tax revenues. Business taxes are up to 30 percent higher than the regional average, while real estate taxes on businesses are two-thirds of the regional average.
“My bill will give the city the opportunity to realign its tax revenues to stimulate job growth for the region,” Taylor said.
Representative John Taylor
177th District
Pennsylvania House of Representatives
Media Contact: David Foster
267.207.0207
dfoster@pahousegop.com
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