How Philly’s Accountants Can Easily Raise $100 Million for the City

Photo by LIgorko/iStock

If you have up to three kids and make less than $54,000 a year, you are probably owed about $6,300 this year from the federal government. In fact, the government has likely owed you this money for the past few years, and you can apply for that too. No, I am not making this up.

It’s called the Earned Income Tax Credit. It’s money owed by Washington to low-income individuals and, unfortunately, too many people in Philadelphia are leaving it on the table. How many? According to City Councilman Allan Domb, about 40,000 people in the city are eligible for an average refund of about $2,500. The amount of money left on the table last year? About $100 million. Read more »

Seattle Will Now Be Taxing Its Rich. Should Philly Be Doing the Same?

Photo by aiisha5/iStock

Looks like the city of Seattle’s at it again.

Despite a recent independent study conducted by the University of Washington that found that the city’s planned $15-per-hour minimum wage is already driving away small businesses and reducing employment, the town’s elders are still not satisfied. So last week, Seattle’s City Council approved a new measure that would impose a 2.25 percent income tax on the “wealthy” — those making $250,000 per year individually (or $500,000 jointly).

“Seattle is challenging this state’s antiquated and unsustainable tax structure by passing a progressive income tax,” the city’s mayor was reported as saying by Fox Business. “Our goal is to replace our regressive tax system with a new formula for fairness, while ensuring Seattle stands up to President Trump’s austere budget that cuts transportation, affordable housing, healthcare, and social services. This is a fight for economic stability, equity, and justice.”

Ah yes, it’s Trump’s fault. Read more »

Excited About Tax Reform? Don’t Be.

Photo by NoDerog/iStock

Photo by NoDerog/iStock

It’s tax deadline time, and regardless of whether we’re receiving a refund or we owe money, most of us usually take a moment to look at our returns and reflect and on just how much we’re paying to the government. Sure, we know that taxes are a necessity and we’re all willing to pay our fair share. In fact, a Gallup poll released last week found that 61 percent of us believe our federal income tax is fair. But that same poll also concluded that more than half of us still feel that our taxes are too high. So if we could pay a little less, that would be nice too.

That’s what the Republican party believes. Which is why tax reform is such a high priority on their agenda. The Trump administration and congressional leaders feel that making the system less complex and — most important — lowering tax rates for both individuals and businesses will spur economic growth and investment. That’s the reason behind their push for tax reform. Read more »

Philly Financial Watchdog: Revenues Up, But So Are Overtime Costs

popenstreets_cityhall

Photo by Bradley Maule

A quarterly report from Philadelphia’s financial watchdog says revenue in the general fund is much higher than expected — but that that overtime costs are soaring.

The Pennsylvania Intergovernmental Cooperation Authority, created by the state in 1991 to “restore the financial stability” of the City of Philadelphia, released its report earlier this week. It says the city’s general fund balance at the end of the year is projected to be $95.8 million — a whopping $55.5 million higher than a five-year estimate predicted.

But the report also noted that overtime payouts in the first quarter of fiscal year 2017 — which ended on September 30th of last year — represented 14.5 percent of total wages/salaries, the highest percentage since fiscal year 2010. Read more »

Pew: Philly Gives Out $200 Million in Business Tax Breaks Every Year

In order to counteract what many see as an overly expensive and intricate business tax structure, Philadelphia has turned to tax credits and special incentives to a degree not seen in most other big cities in the United States, according to a report released by the Pew Charitable Trusts last week.

The city forgoes more than $200 million a year in tax revenue through 21 separate tax-credit programs for businesses, according to the report. The amount of revenue exempted by those programs is growing much faster than the tax base as a whole, Pew found. And while acknowledging that some of the tax incentives have helped businesses create jobs and construct buildings that might not otherwise have existed, Pew concluded — as have so many others who have studied these kinds of tax breaks — that it’s impossible to tell exactly how effective the programs are.  Read more »

Insider: Allan Domb’s Truly Awful Idea

Photo by Jared Piper/Courtesy of City Council's Flickr

Councilman Allan Domb | Photo by Jared Piper/Courtesy of City Council’s Flickr

(Editor’s note: This is an opinion column from a Citified insider.) 

Many Philadelphians cheered real estate developer Allan Domb’s election to City Council last year. Finally, they said, a real businessman who could bring innovative, market-savvy solutions to our city’s economic problems.

But those lofty hopes fell to earth with a dull thud when Domb introduced his first major piece of legislation: a bill to double the 10-year residential tax abatement to 20 years for houses worth $250,000 or less. It seems great on the surface, but it’s actuality a terrible idea.

Domb claims this expanded tax break on new home construction and major rehabs will encourage developers to build houses in struggling neighborhoods, and lead owners of blighted properties to fix them up.

It’s a laudable goal, one we all should support. But his proposal won’t actually further that goal, and will cost us precious tax dollars to boot. Domb’s plan will fail because it’s based on a misunderstanding about how the abatement works — a misunderstanding that’s shocking given his reputation as a real estate mogul. Read more »

N.J. Bill Would Close Corporate Tax Loophole

Democrats in the New Jersey State Legislature introduced a new bill that would close a corporate tax loophole.

State Senators Ray Lesniak, Linda Greenstein and Paul Sarlo introduced a bill that would require “combined reporting” on income from multi-state corporations. Some corporations use subsidiaries to report income from New Jersey in other states — so they can avoid New Jersey’s 9 percent income tax. Read more »

Late on Taxes? Didn’t File? A “Tax Amnesty” Could Help You Make Things Right.

(Creativa Images/Shutterstock)

(Creativa Images/Shutterstock)

Maybe you put off paying your taxes a little too long. Maybe you never filed in the first place. If that’s the case — and you’re worried about state government cracking down on you — some good news may be in the offing: A tax amnesty could be on the way.

Rep. Marguerite Quinn, a Bucks County Republican is proposing a tax amnesty to give scofflaws a chance to make good while at the same time raising fresh funds for state government. Taxpayers seeking amnesty would receive reduced interest on their unpaid taxes, as well as a eduction of other penalties. Read more »

Donald Trump’s Tax Plan Costs Government $10 Trillion

Developer Donald Trump displays a copy of his net worth during his announcement that he will seek the Republican nomination for president, Tuesday, June 16, 2015, in the lobby of Trump Tower in New York. (AP Photo/Richard Drew)

Donald Trump. (AP Photo/Richard Drew)

Like it or not, Donald Trump is looking more like a presidential candidate that’s in the race for the long haul — and now he’s beginning to offer specifics into what a Trump presidency would look like.

Earlier this week, he released his plan to change the United States tax code. It would consolidate seven tax brackets into four, and create a large base of people who pay no taxes at all. Top earners would see their tax rate fall from 39.6 percent to 25 percent, while those earning $50,000 to $150,000 per year would pay 20 percent. Trump says the plan would lead to growth of upwards of 6 percent per year. Read more »

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