Wage Tax Increase in Philadelphia

Three of the four legislative caucuses in Harrisburg have taken opposition to Philadelphia’s council move for a wage tax increase. Although Mayor Nutter of Philadelphia opposes a wage tax increase, he needs the support of the Legislature of his budget plans including an increase of the local sales tax and a delay of the city’s pension plan obligation.

Senate Majority Leader, Dominic Pileggi as made it public that he would “strongly oppose anything that would have the impact of raising the Philadelphia wage tax.”

Currently, the wage-tax rate is 3.93 percent for city residents and 3.5 percent for nonresidents. Although the city gets a cut of the states gaming revenue to offset wage taxes, certain conditions apply allowing them to be raised. For instance, city tax collections must drop by more than 2 percent to allow an increase.

Even Mayor Nutter’s finance director, Rob Dubow believed there would be a negative response from the legislature.