By Marc Stier
It appears that my recent letter to the editor in the Inquirer, claiming that business taxes are not a deterrent to business activity in Philadelphia, got under the skin of MAGA mega-donor and Pennsylvania’s richest man, Jeff Yass. He responded with a letter of his own:
“In a recent letter to the editor, Marc Stier of the Pennsylvania Policy Center states that research shows business taxes are not deterrents to economic growth. Quite the opposite, he adds. The city wage tax, currently about 3.5%, generates approximately $2 billion per year. May I suggest we double it to 7%, raise an additional $2 billion, and increase per-child spending in Philadelphia to $42,000 per student — up from the current $32,000 — for each of our
Jeff Yass, Bala Cynwyd
Jeff Yass’s financial acumen is highly touted, so I’m a little surprised that he doesn’t know the difference between Philadelphia’s business taxes and its wage taxes. Leaving that aside, and despite his sarcasm, he’s basically right. We actually could double business taxes in Philadelphia and not hurt economic growth. And if we added $2 billion to our schools in Philadelphia, we would see prosperity increase for all of us.
But I wouldn’t recommend it because it would be unfair. Philadelphia, and Pennsylvania as a whole, already tax people with a great deal of income and wealth, like Jeff, far too little and the rest of us too much. In Pennsylvania as a whole, families in the bottom 20%, with an average income of $12,000, pay 15.1% of their income in state and local taxes. Families in the middle 20%, with an average income of $63,300, pay 11.4% of their income in those taxes. But families in the top 1%, with an average income of $1.7 million, pay only 6% of their income in state and local taxes.
That’s why we have proposed a small tax on intangible wealth for Philadelphia, which would raise over $230 million a year. And this summer, we will propose a similar tax for Pennsylvania, which would raise over $2 billion a year and we would dedicate to our schools and property tax relief.
It’s people like Yass, not the average Philadelphian and Pennsylvanian, who should be paying more to fund our schools. The reason he doesn’t pay more now is that he seems to have an almost unlimited amount of money to contribute to the politicians who return the favor by keeping his taxes low. The Republicans to which he contributes plan to give a huge tax cut to the ultra-rich in the budget reconciliation bill they are currently considering.