Philadelphia Sales Tax Hike: Just Say No

Editor’s Note: J. Matthew Wolfe is a member of the Republican State Committee of Pennsylvania, representing the 8th Senatorial District in Philadelphia and writes for The Loyal Opposition, a Republican policy group focused on issues facing the City of Philadelphia.

Greetings from Philadelphia. Weather is hot and humid. Business climate is oppressive.

Philadelphia’s Mayor and City Council want to raise Philadelphia’s sales tax to 8%, fully 33% more than most of Pennsylvania. Fortunately, they need State Legislative approval to perpetrate this lunacy.

This legislation will impact Pennsylvania’s budget and will have an even bigger effect on Philadelphia’s economic health. As a Philadelphian I am asking that you alert your legislators to your opposition to this scheme.

They argue that they are not asking for state money, but only the tools to help themselves. Don’t buy it. Increasing Philadelphia’s sales tax will hurt all Pennsylvanians.

Democratic City Council President Anna Verna said it best when she acknowledged that "The surrounding counties will be the beneficiary of the sales-tax because if you live in Philadelphia and have to buy a large item and it is taxable, you’re going to go to another county where you may not have to pay that tax."

The "surrounding counties," however, are not just suburban Pennsylvania counties. New Jersey and Delaware are included. When buyers leave Philadelphia to go out of state to make purchases, Philadelphia loses its 2%, but Pennsylvania loses 6%, a much bigger amount.

Additionally, increasing the sales tax is another incentive to buy online, where little of the sales tax ever gets into the state coffers.

There is another way that Pennsylvania loses. Philadelphia should be an economic engine that helps drive Pennsylvania. Instead, due to mismanagement and corruption, it is a drag. The legislature is complicit in this problem, time and time again making special exceptions for Philadelphia, allowing our Mayor and City Council to take actions that have chased taxpayers, businesses and jobs out of the city and out of the region. Don’t let them do it again.

The City flat out spends too much money. Philadelphia cannot continue to try and be all things to all people. It needs to focus on the core municipal responsibilities of public safety, sanitation and public education. There IS enough revenue in the budget to perform those functions efficiently without any tax increase.

How much money has gone to support the "Culture of Corruption?" How many Democratic fundraisers, State Senators and City Treasurers must go to jail before changes are made?

In the past few weeks, Mayor Nutter handed out over a million dollars in grants to businesses. In the best of times, wouldn’t it make sense to use that money to lower every business’ taxes? Let’s not kid anyone, though. Does anyone think that these grants were given out in a fair process? Did the recommendations of the Mayor and City Councilmen mean more than any objective evaluation?

The City passes laws that increase its costs. The "Slavery Disclosure Law" requires any business, even new ones, to disclose whether the business ever owned slaves or benefitted from slavery. The "21st Century Minimum Wage Law" requires that any business doing business with the City pay all of its employees 150% of minimum wage. Laws such as these shrink the number of bidders on City contracts and increase their costs. Change these and other laws before increasing taxes.

There is much spent on "programs" that have nothing to do with public safety, sanitation or education. Don’t get me wrong, most of these programs do good things. Bottom line, though, is that the City cannot afford to destroy its tax base to fund programs that are favored by special interest groups and help individual City Councilmen get reelected.

Could the City save money by contracting out its trash removal and health care centers? My guess is we will never know because the administration and City Council will never seriously study the possibility. Shouldn’t that at least be considered?

Contact your legislators, Democrat or Republican, and demand that Philadelphia be treated like any other Pennsylvania county. It is not a Philadelphia issue, but one that affects every Pennsylvanian.

Make Philadelphia live within its means and preserve Pennsylvania’s treasury.