Heated debate — and hot air — on business taxes.

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Heated debate — and hot air — on business taxes.

POSTED: Thursday, December 2, 2010, 6:20 PM
Filed Under: Budget | CouncilMANIC | News

"Should there be winners and losers?"

Less a question than a zen koan, such was the riddle Councilman Wilson Goode Jr. put to witness after witness in the marathon hearing that stretched from Tuesday to Wednesday on a proposal to change the way Philadelphia taxes businesses.

Councilmembers Bill Green and Maria Quinones-Sanchez want to shift the tax burden from the net income (profit) portion of the tax — which only applies to businesses inside Philadelphia — to "gross receipts" (sales), which applies to all business transacted in the city.

The idea is to get at large, out-of-state corporations — Wal-Mart, for example, doesn't have to pay an income tax here, but a bodega owner does — while letting small businesses of the hook. To that end, the bill would exempt the first $100,000 of sales, immediately exempting more than 30,000 local businesses from that portion of the tax altogether.

There's plenty of opposition to the bill, though many of the actual businesses testifying against it were large corporations based out of the state (Marriott, large construction firms based in Jersey).

Most of the testimony favoring the change came from small, Philly-based businesses (bodegas and small groceries, car dealerships, the Kensington & Allegheny Business Association).

But no one opposed the bill as vociferously as Goode, who used his time to question the witnesses largely for delivering a series of rhetorical riddles — "Should there be winners and losers?" being his clear favorite.

Here's a snippet from the hearing, in which Goode interviews Anthony Tigano, a car dealer who favors the bill (read more in this week's A Million Stories):

Goode: Should there be winners and losers? In terms of business taxation?

Tigano: That's a very good question – I believe the way the system is set up is currently unfair. I think firms set outside the city …

Goode: My question is should there winners or losers?

Tigano: I'm answering your question: the present system is unfair –

Goode: I have a second question as well.

Tigano: Ok … I was just trying to answer your first question.

Goode: I'm going to ask you my second question. Do you support the land value tax?

...

Tigano: Um, I'm not familiar with that question. . . I'm trying to answer a question on the [business privilege tax].

Goode: When we consider tax structure we do not do it in isolation.

Of course, as the testimony made quite clear, there are already winners and losers. Currently, big out-of-state corporations are the winners in the current tax structure, which lets them avoid one part of the tax that local businesses must pay.

And there's obviously room for healthy debate: Councilmembers Green and Quinones-Sanchez don't dispute that their bill will benefit some businesses more than others: They simply argue that the change is more fair than the current practice. The city, represented yesterday by Finance director Rob Dubow, disagrees. Economic consultant and former city finance director Stephen P. Mullin, on the other hand, thinks the bill's a good idea.

But of all the questions worth asking, "Should there be winners and losers?" seems a little ... existential.


Tweets that mention Heated debate — and hot air — on business taxes. :: The Clog :: Blog Archive :: Staff Blog :: Philadelphia City Paper -- Topsy.com
Posted 2010-12-02 15:11:29
[...] This post was mentioned on Twitter by Eva Miranda, Roy Hughes. Roy Hughes said: Heated debate — and hot air — on business taxes.: The city, represented yesterday by Finance director Rob Dubow,... http://bit.ly/frhyni [...] 

phillygrrl
Posted 2010-12-02 15:22:29
I got the job I have now because of that internship :) Do it, kids!

The Blogger Tax and what the hell is up with Wilson Goode Jr? » reluctant rider
Posted 2010-12-02 18:18:40
[...] Unfortuanately, CC Wilson Goode Jr. seems to not be happy about this.  I DON’T KNOW WHY.  Either he’s just cooky or there’s some funny business going on here.  Here’s the interesting take by the city paper: City Paper Article [...] 
Posted by Isaiah Thompson @ 6:20 PM  Permalink | Post a comment
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