Philadelphia Sales Tax Increase Bad for Business and for Pennsylvania
Chris Freind writes on how the proposed increase of Philadelphia’s sales tax from 7% to 8% (6% state rate, local rate to double from 1 to 2%) will harm the Philadelphia economy, as well as Pennsylvania.
The reality is that people will simply cross the city line to make their purchases, from TVs to refrigerators to washing machines. So not only will the city fail to realize the anticipated revenue of its tax increase, it will lose the sales tax in its entirety. But this isn’t just a Philadelphia issue. When people cross into New Jersey, or better yet, Delaware (where there is NO sales tax), Pennsylvania will lose its 6 percent. And more people will be incentivised to use the internet to shop, yet another way to avoid the tax.When will elected leaders realize that you cannot tax your way out of a recession? Taxes never lead to prosperity. They simply result in people and businesses fleeing to a friendlier location.But this obvious truth is lost on Philadelphia’s leaders.Study after study show what the citizens of Philadelphia already know: that our great city is being devastated because of politicians who care more about themselves than the people they serve.Philadelphia ranks as one of the least desirable places to locate. It levies some of the highest taxes of any city in the country. Its educational product is horrendous.Between 2000 and 2007, Philadelphia lost 4.5% of its residents, the largest percentage drop of any Top 25 city. From 1990-2000, the City of Brotherly Love’s population losses were the third largest of the 243 cities with more than 100,000 people. Since 1970, the city has lost 265,000 jobs and 450,000 residents.