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In my previous column http://Philadelphia's hostility to prosperity  I chronicled the negative impact of Philadelphia regressive tax policies. A version of Mayor Nutters 3.9 billion dollar budget has passed it's first hurtle in city council. The Mayors sugar tax has been excluded from the plan and replaced with a "temporary" 9.9 percent increase in property taxes. ( I have yet to discover such an elusive creature as the "temporary tax increase") The garbage removal fee has been modified to apply only to apartment buildings, condiminums, and business' as opposed to each individual house hold. As the brilliant Thomas Sowell has often said," Government solutions to problems never produce success'  only trade offs and unintended consequences".  This property tax increase is absurd, but this is what you get when you elect polticians who refuse to even consider the consequences of their actions. The net effect of this tax increase in combination with the Obamacare 3.8 percent increase in unearned income (as if there is such a thing)which will be shouldered buy the owner of rental properties, will be more tax paying citizens moving away from the city due to the inevitable rise in rent as a result of landlords seeking to maintain their bottom line and the ability to service these properties in the wake of higher taxation. Which in the end reduces the disposable income of those who rent their homes or apartments. As far as the trash pick up fee this will only add to that burden, and somehow I envision people taking  trips down to the city dump to dispose of their trash themselves in an effort to avoid the fee.  

But the mayor is still pushing hard to include his sugar tax in the final version of the budget. The mayor (video included)gave an absolutley incoherent response to a the spouse of a coca-cola worker who was concerned about how the proposed tax increases will effect her husbands employment. The mayor told the woman well then maybe you should drink water, A let them eat cake moment if there ever was one. He also revealed the true intention of his sugar tax, it is not really an effort to raise revenue but to use the tax code  for social engineering.  He went on to explain to the women that Coke & Pepsi make a variety of different products so people will choose those products instead of those in which the new taxes are applied. If this is the case and you expect people to move away from the products you are taxing well then how can you say it will produce an estimated revenue stream to close the deficit. 

I personally have no problem with vice taxes such as cigarettes and alcohol, the founding fathers themselves placed extra levies on alcohol to discourage it's abuse among the poor. But they were firmly against income taxes. But is sugar a vice? It is used in just about everything we eat. Common sense tells us that to much of anything could be detrimental to someones well being. I drink diet soda not because I'm on a diet but because regular soda is just to sweet for my taste, and I like my teeth the way they are. I feed my child healthy snacks because he is a growing boy who needs his nutrition. I don't need Mayor Nutter and the rest of our nanny state city council to tell me what to eat or how to feed my child. My parents did a find job of doing that, and just maybe if our politicians would stop trying to parent us and start governing responsibly, we would not find ourselves with a 150 million dollar deficit, and that would only be the tip of the ice-berg to fiscal sanity

The City government of Philadelphia is downright hostile to even the idea of economic growth. Philadelphia’s various mix of business and individual tax burdens are ranked among the highest in the nation in almost every area of tax policy. From city-wage taxes, real estate transfer fees and the ever so arrogantly named business privilege tax. Philadelphia’s BPT is currently 6.5 percent of a business’s gross profits, but even if a business posts a loss they are still required to pay .19 percent fee.

But .19 percent of what? This is the economic equivalent of seriously trying to get blood from a stone. It’s working, the results of this dysfunctional economic policy has been the loss of about 250,000 jobs over a 40 year period that’s 6250 jobs per. You can look at the employment number two ways. One is to say that 6250 people lose their jobs every year, The other is to say that a good percentage of those people are middle class small business owners that have been chased from the city by what has become a confiscatory fiefdom. This is evidence not only in Philadelphia’s decreasing revenues but from it’s population decrease of more than a half of a million people over that same 40 year period. And it is not the evil rich who are fleeing, ironically they seem rather happy in Philly, however nearly half of the cities citizens live below the poverty line.

They are getting blood from a stone, Philadelphia is hemorrhaging it middle-class work force & entrepreneurs by taxing itself out of competition with more business friendly counties and cities. So what is Mayor Nutters proposal to stop the bleeding? More taxation. The Mayor has proposed both a 2cent per ounce tax on all beverages with added sugar and an annual fee for waste removal up to $300.00 per family. The sugar tax is completely regressive and will only drive up the price of services at all of Philadelphia’s eateries, they even want to tax chocolate milk. 2 cents per ounce doesn’t sound like much but add that to the city sales tax and you add 1.50 to one 2 liter bottle of soda and 32 cents to 16 ounces of whatever your sweet beverage of choice maybe. This hurts everyone from the local pizzerias who buy in bulk to a little kid scrounging up 4 quarters to get a Yoo-Hoo. Of course this is proposed as some sort of health initiative to save the children from obesity. If the city were really interested in the health of it’s citizens it would give tax incentives like deductions for gym memberships and sports equipment when you sign your children up for youth athletics.

And as for the waste removal fee, politicians like councilman Curtis Jones of the 4th district has been quoted as saying “if we want the streets cleaned we have to pay for that” and council majority leader Marion Tasco been quoted as saying “you cant have it both ways if you want something you have to pay for it.” That is almost comical coming from a group of politicians who have found themselves with a 150 million dollar budget gap. With many of Philadelphia political heavies sweet on the notion it is possible that some version of this may come to be.

According to Mayor Nutter this fee will help to close the budget gap and promote recycling and other new programs. How do you fill a budget gap by spending the theoretical new revenue on new programs? But the more important question is what exactly have the citizens of Philadelphia been paying for up until this point?