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Second look at report shows even more regressive taxes in Philadelphia
Despite report's faulty property tax data, Philly's poor still pay more than almost any other city in America.
Second look at report shows even more regressive taxes in Philadelphia
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Some fact checking by WHYY's Dave Davies revealed that a Washington D.C. tax report ranking Philadelphia as the city with the second highest taxes for families contained faulty property tax data that apparently made us look worse than we are. The City Paper covered this report last week.
A spokesmen for Washington D.C.'s municipal Office of the Budget, which assembled the report, said that they relied on official data from each city examined in the survey and, understandably, did not conduct an independent review of all 51 cities' own statistics on taxation for accuracy. Philadelphia's official numbers appear to have been out of date and not reflective of average property tax payments.
The initial findings showed that Philadelphia taxed both rich and poor alike at the second highest rate of all cities surveyed. Davies' own analysis, with more accurate property tax data, revealed that while tax rates were lower for the study's four wealthiest categories than originally reported they remained just as high for the poorest quintile. The new data shows that a hypothetical family of three making between $50,000 and $150,000 a year were taxed at either the seventh or eighth highest effective rates of the 51 major cities surveyed. Yet a family on a $25,000 income still paid a greater chunk of its overall income to state and local taxes than any other city surveyed (with the exception of Bridgeport, Connecticut) largely due to the wage tax.
That's means that when it comes to state and local taxes, Philadelphia's poor may actually be taxed more regressively than initially reported, at least when compared to other big cities.
It's worth noting that there may be other methodological issues with the report. The study assumes that the poorest families would face rental costs instead of property taxes and that 20-percent of rent payments go towards a landlord's tax bill. That percentage appears to be based on a popular "rule of thumb" cited frequently by real estate "experts" and advice guides for landlords but not, seemingly, on actual data. The true ratio of tax bills to rental costs may be lower than estimated, but since the percentage was applied to all survey localities it could have skewed different cities' numbers equally.
The study also assumes that a family of three would only pay only $9,610 a year in rent, a figure that most Philly renters would probably find to be somewhat optimistic.
Davies makes the point that the study's lesson is that it's extremely difficult to accurately compare cities across the country on a metric as seemingly straightforward and universal as taxes. While that's certainly true, the fact that more accurate data only exaggerated the gap between rich and poor reinforces the fact that there is something wrong with the way Philadelphia collects its taxes. While politicians drone on about job creation and the battered economy, the current tax system in the city and state provides an unnecessarily high burden for the working poor that are already struggling to succeed on meager wages.
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