Quote:
Originally Posted by mja
First of all, this is exactly what anyone means when they say Philadelphia taxed itself into poverty, not that taxes made anyone poor. It seems rather self-evident to me, so your apparent misunderstanding of the claim seems disingenuous.
Also, you can't separate these two events out the way you'd like, as they're part of a reinforcing loop.
The city HAS to have a tax base, and it has to increase it. That's the only way forward and it needs to be the focus, and needn't pit the needs of the one group over another. Trying to ameliorate social ills via increased taxation is generally not a path the city should go down. That sort of thing needs to happen at the national level.
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Regardless of what was being implied regarding Philadelphia taxing itself into poverty, the statement is simply incorrect.
I agree that the population loss and the tax increases were a reinforcing loop in the sense that Philadelphia's response to population loss, particularly HOW they raised taxes further hurt the city. But you can separate out these two events because they occurred in a very distinct order. Philadelphia's wage tax was below 2% for quite some time and remained under 2% even as Philadelphia began to hemorrhage population.
Philadelphia's wage tax increased only a fraction of a percent between 1952 and 1969 (nearly 20 years!) and never went above 2 percent the entire time. This was the time period where everything went bad, this was the time period where subsidized automobiles and suburbia destroyed cities, this was the time period where manufacturing went over seas. To act like if only Philadelphia hadn't raised its wage tax a fraction of a percent, none of the manufacturing would have gone overseas and the middle class exodus to the suburbs wouldn't have begun is pure nonsense. These events were happening no matter what and Philadelphia's tax burden was not even a factor.
It is only after 20 years of the city's tax base falling apart, that the taxes even start to become an issue! Between 1969 and 1971 the wage went up nearly twice as much in those two years as it had in the previous two decades. At that point a 3.31% wage tax rate may have been a factor in accelerating the great migration to the suburbs, but it was only hastening what had already been happening for 20 years. And honestly even at that point when the taxes were actually high enough that they could have been an issue, they weren't. Certainly not in comparison to other much stronger factors. By 1970 the white flight/redlining tipping point had been passed. It was a race to sell your property for what you could get before further exodus decreases property values even further. Philly lost almost 300 thousand people in the 1970s. How many fewer people would Philly have lost if they didn't increase the wage tax? I mean honestly, white flight was already in full swing, property values are cratering, but you think if Philly would have left the wage tax alone, everyone would have stayed? Philadelphia's population loss was happening no matter what the city did tax wise, the taxes were nothing more than a rounding error around the edges.
The real problem with Philly's taxes don't really come until the late 80s. By that time, urban centers around the country had stabilized, more people wanted to live and work in cities. And yet here's Philly, unable to capitalize on this boom because we're sitting here with a wage tax rate of nearly 5% by that point!
The tax issue in Philadelphia is a real one. It is desperately in need of change. Templeguy just made some great posts, I agree with them 100%. But the population and job loss and the tax problem are two related but separate and distinct events. Population and job loss came first largely through federal policy decisions that were entirely out of Philadelphia's hands. The taxes were the response. And it's not like they were trying to fix society's ills at that point as you suggest, they were attempting to hold the finances of this city together as tax revenues cratered and half a million people left the city. Clearly the response was a bad one, and one we still have to deal with today. But it was a response. It is flat out incorrect to say Philadelphia taxed itself into poverty. Philadelphia taxed itself into making it harder to escape poverty if anything, but we were already there.
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