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Philly ranked second highest for tax burden, poor still pay more
An annual report from the District of Columbia's Office of Revenue Analysis has ranked Philadelphia as one of the cities with the highest tax burdens for families, both rich and poor, in the United States.
Philly ranked second highest for tax burden, poor still pay more
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While Philly stares down what property tax reform means not only for Philly homeowners today but also for the city's tax structure in the future, a new analysis indicates just how severely the state and local tax structure impacts residents. As reported on 247WallSt.com today, an annual report from the District of Columbia's Office of Revenue Analysis has ranked Philadelphia as one of the cities with the highest tax burdens for families, both rich and poor, in the United States.
The breakdown, the latest in a string of economic analyses that have remarked on our city's extraordinarily punitive tax rates, examined estimated property, sales, auto and income taxes paid by five hypothetical families of three, earning between $25,000 and $150,000 a year. Estimates were gathered from the largest city in each state, and Washington, D.C.
The results, rather unsurprisingly, indicated that the "wealthy" family earning $150,000 in Philadelphia would fork over, on average, an estimated $19,951 a year, the second-highest effective tax rate out of all 51 cities examined in the report.
And, yes, that's excluding federal taxes.
But much more troubling were the results for the hypothetical family making $25,000 a year, a very real scenario in a city with a 26 percent poverty rate. The report found that low-income Philadelphians still faced the second highest family tax burden out of all the cities in the study, at a whopping $4,513 a year. Legislation that would have made Philly wage taxes more progressive was reversed in City Council last year.
And yes, that's taking into account that said family is more likely to be leasing a property: the report assumes that 20 percent of rental costs go towards paying a landlord's property tax bill.
In other words, in spite of rhetoric from certain failed presidential candidates that paint tax policy as an issue of "makers" and "takers," poor families in Philadelphia still get hosed on the state and local level. In fact, they're actually pitching in a bigger chunk of their overall income to city coffers, nearly 20 percent, than a wealthy family.
To be fair to the city, these rates are heavily affected by Pennsylvania's state taxes, which have also been speared as hideously regressive if not terribly excessive. The report also does not take into account that many low-income families in Philadelphia are much less likely to pay auto taxes at all, relative to other cities.
Additionally, places like Chicago and New York, relative cohorts of Philadelphia, were also on the list of the top ten most taxed cities. In fact, most of the cities rounding out the top of the list were other large metropolises, with extensive, costly infrastructure and social needs that engender very different costs than, say, the lowest taxed "city" in the report, Cheyenne, Wyo.
But Philadelphia, for all its beauty and strength, is simply not in the same economic realm as New York or Chicago, and can ill afford to alienate families rich or poor with punitive taxes. But that the burden is unequally shared by poorer families is simply a slap in the face, particularly in light of how much lip service is paid by local politicians to the seemingly intractable issue of urban poverty in Philadelphia.
The reason this report exists at all is so our politically connected cousin to the south can measure where it stands on taxes relative to other cities each year. Both city and state lawmakers might do well to follow Washington, D.C.'s example and take a long look in the mirror.
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