FOR IMMEDIATE RELEASE
CONTACT: Kirstin Snow, Communications Director, snow@pennpolicy.org
March 18, 2025
MEMBERS AND CONSULTANTS TO THE ADVISORY COMMITTEE TO THE TAX REFORM COMMISSION SPEAK OUT IN OPPOSITION TO THE
TAX REFORM COMMISSION REPORT and MAYOR PARKER’S TAX PLAN
Pennsylvania Policy Center Releases Report on Taxes, the Economy, and Poverty in Philadelphia
Philadelphia, PA—Members of and consultants to the Advisory Committee to the Tax Reform Commission held a press conference on Tuesday, March 18th, to speak out againstthe Tax Reform Commission’s proposal to make deep cuts to Philadelphia’s Business Income Receipts Tax (BIRT) and Mayor Parker’s embrace of parts of that proposal.
At the press conference the Pennsylvania Policy Center released a new paper, written by its executive director, Marc Stier, that explains why it makes more sense for Philadelphia to use funds available for cutting taxes to instead invest in poverty reduction strategies that have been successful in other cities around the country. The paper can be downloaded here. Stier’s slide deck summarizing parts of the paper is available here.
Reverend Greg Holston began the press conference by focusing on the moral imperative of addressing poverty. He said, “The cause of racial equity cannot be advanced with tax reform policies that do not touch the lives of African Americans, who are 40% of the population of Philadelphia. Across-the-board business tax cuts do not address the deep poverty in the city of Philadelphia, and, in some ways, they continue to exacerbate it. We need creative proposals such as expanding the BIRT exemptions from $100k to $200k or creating a wage tax exemption for low-income individuals.” Black communities in our city have suffered for decades because of public policies that have created a city segregated by race and economics. If the city has hundreds of millions of dollars to give tax cuts to wealthy individuals and businesses, those funds should instead go to proven strategies to reduce poverty in those neighborhoods.
Stan Shapiro, former chief staff attorney to City Council and coordinator of the Tax Advisory Committee, pointed out that Section 4-900 of the City Charter mandates the Tax Reform Commission to center fairness and equity in its recommendations. While this provision isn’t legally binding on the Mayor and City Council, it was approved by a vote of the people and therefore carries significant moral weight. The Mayor’s current tax proposals contradict this mandate by proposing substantial tax cuts for wealthy residents and big businesses, while increasing the tax burden on small businesses. These proposals run opposite to both the spirit of our Home Rule Charter and the expressed will of the voters and should therefore be rejected.”
Marc Stier, executive director of the Pennsylvania Policy Center and senior consultant to the tax advisory committee, noted that while voters in Philadelphia consistently reject the trickle-down policies put forward by Republicans at the federal and state levels, Democratic political leaders in our city have adopted the same ideas. He said, “Like Republicans always do, the Tax Reform Commission and its economic consultants drastically overestimate the number of jobs that would be created by eliminating the net income portion of the BIRT over ten years and underestimate the costs in lost revenue. Our review of their proposal shows that the Tax Reform Commission’s ten-year plan would cost the city $1.3 billion in lost revenues over ten years, while only creating 14,500 new jobs. And only 20%, or 2,700, of those jobs would go to current Philadelphians. Policies that directly reduce poverty would create far more jobs at a much lower cost.
Jonathan Stein, former director of Community Legal Services and member of the 2003 Tax Reform Commission, said today that, “our tax system, including our regressive 3.75% city wage tax, should not be driving the working poor into deeper poverty.” He added, “The current city wage tax refund law doesn’t work as it only reaches about 3% of the working poor who are eligible. It needs to be de-linked from the state Tax Forgiveness law to have the full wage tax exempted and to be made automatic so all those eligible get its benefits without the many obstacles now blocking access to it. Although the Tax Reform Commission adopted these wage tax refund reforms, the Mayor’s proposals to City Council failed to include them.”