Hearing Held on Proposed Philadelphia Tax Reform

Nadine Stoner

[Reprinted from GroundSwell, 2001]

On February 12, a hearing was held in Philadelphia City Council chambers, starting at 10:00 AM, relating to Philadelphia Controller Jonathan Saidel's tax reform package. GroundSwell has been informed that Pennsylvanians Joshua Vincent, Jake Himmelstein, Kenneth Ford, and Richard Biddle attended the hearing. About 22 members of the Pennsylvania Fair Tax Coalition testified at the Philadelphia hearings, including Alanna Hartzok, Joan Sage and Uda Bartholomew.

In Jake Himmelstein's observation, little was accomplished at the hearing since it was only attended by the President of City Council, Anna Verna, and Councilman at large Cohen, and the daily press coverage was spotty.

The major spoken opposition was from a new car dealer association and parking lot operators who claimed that the land value tax would be a great burden. However, the fact that there were 54 people and organizations willing to testify for tax reform was an encouraging sign.

Center for the Study of Economics President Joshua Vincent has closely followed, and kept other Georgists informed, about the developments on the proposed tax reform, which includes Land Value Taxation. (See Nov.-Dec. 2001 GroundSwell.) "We have lots of silent opposition," Vincent emailed, "and we need to do what we can to help, because the City Controller has taken a lot of heat for this good idea."

A fax proposed to be sent to the Philadelphia Mayor, Council, and other important officials had been prepared and emailed to Georgists by Vincent, as follows. A convenient way was offered to have the fax delivered through the web site www.hallwatch.org. "Especially important to the future of Philadelphia is the component of the program known as Land Value Taxation (LVT).

"LVT is a way to fix the fatal flaw of the modern property tax: When someone builds and makes the city a better place to live their taxes sharply increase. If one lets a building collapse or defies the market by keeping land vacant, the tax bill remains low. That's not only dumb, it's wrong. It rewards dysfunction and punishes commitment to the community. End of story.

"LVT is different from the usual abatements and exemptions. One does not have to be "connected", clever or have a brace of legal staff to wade through the maze of forms. LVT applies to all property owners across the board. The most modest of homesteaders will see that improving a building on her own dime and her own time will no longer mean paying a penalty. LVT is a program that will help that part of Philadelphia met with either neglect or scorn; our hard-pressed working neighborhoods. They have never had a program or privilege. This program is their chance.

"If the land tax is adopted almost all homeowners will see a tax decrease.

"Mr. Saidel's program is progressive and proactive. Philadelphia collects more of its revenue from the wage tax than any other source. We know that we have to reduce that corrosive tax now: It drives people away, and it drives business away. Yet, we need to support the programs and services that so many Philadelphians depend on. The State is NOT going to help us anytime soon. Therefore, the innovative land tax is the logical course Philadelphia should take.

"With LVT, Philadelphia has a way to collect the same amount of revenue from the property tax and yet not punish the homeowner and small business.

"PLEASE! Support a program that will provide real tax relief to the vast majority of Philadelphians that don't have a program to help them.

"PLEASE! Let Philadelphia have a chance to determine its own fate.

"PLEASE! Give the citizens of Philadelphia a reason to stay in the city we all love.

"Thank you."

Several letters to the Mayor and City Council on the land value tax can be found on the web site www.hallwatch.org. Letter writers whose names GroundSwell readers will recognize are Kenneth R. Ford, Jacob B. Himmelstein, Joshua R. Vincent, Lucia Cippoloni, Arthur P. Yeatman, Uda B. Bartholomew, and S. Arthur Rybeck, Jr., DDS. Also, Ted Gwartney's "Estimating Land Values" presentation given July, 1999 in Arden, Delaware. (See July-August, 2000 GroundSwell for shortened version.)

The Philadelphia Daily News on February 26 published an article about Philadelphia's burdensome wage tax and included an interview with Norristown accountant Jacob Himmelstein "who testified about tax reform before the City Council on February 12."