Good News Philly! Higher Sales Tax!
September 17th, 2009
In a predictable move, due to facing a massive budget deficit, the city of Philadelphia has been working it’s butt off to lobby the PA house and senate for permission to raise the sales tax. Eventually, they caved and now the sales tax in Philly will go up from 7% to 8%. Though this at first may seem trivial, this sales tax increase amounts to a drastic tax increase for anyone who wants to buy or sell anything in the city. It goes without saying, but increasing taxes will negatively impact investment and jobs in the region to some extent. (Theory: Maybe it’s this kind of “tax our way out of the hole” attitude that helped Philly become Detroit #2… just saying…).
It’s a funny thing when the government is completely unable to maintain a budget. Whenever they come to grips with their striking inefficiency and wastefulness they have no alternative but to raise taxes, cutting costs is just too logical a move for a bureaucratically controlled agency.
Naturally, the news is spinning this as positive. “Budget deal averts massive layoffs, service cuts“. What the article’s title doesn’t mention, but the body does, is how exactly the administration came across this giant bag of money – tax increases. The most notable one being Sales Tax. I tried to read the bill (HB1828) in order to give a more detailed account than the news article gave, but it’s 91 pages of legalese b.s. and I couldn’t handle it after a while…You know, for a split second I actually believed that Mayor Nutter would do the right thing and cut costs. What’s that? Their’s “Gullible” written on the ceiling? *Looks up*
As soon as the bill got through the State senate, Mayor Nutter declared victory and sent out a Letter to City Employees praising their ability to ‘overcome’ these drastic budget shortfalls. Here’s an excerpt:
I am so proud of how we have weathered this storm as a city, with a typical fighting Philly spirit. Just think of what we can achieve together when we turn that resilience, that determination, that teamwork towards the tremendous opportunities and endless possibilities that lie ahead.
Really Nutter? You weathered the storm thanks to your resilience and fighting spirit? You “weathered the storm” by deciding it was easier to coercively take more money from your citizens than it is to run a tight ship. Did ‘determination’ really help you? Or was it your lack of care for Philadelphia consumers and producers? I just don’t understand this guy. What big bad monster does he think he fought off? The Big Bad Taxpayer wanting to keep what’s left of his own pacheck?
Anyway…
While doing a quick search on this bill I found some Union folks who had some serious beef with it. Apparently, there was a bit of a compromise and the unions tended to get some terms they aren’t found of, the Union blogger said that the bill would fix benefits and pensions to certain levels which make it dangerous should inflation occur. I guess there is a silver lining afterall. Since I believe some strong inflation is on the way (and there may be signs it is already kicking in, as Bob Murphy notes) there is a possibility for some governmental pain afterall!
Categories: Philadelphia
